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7,971,201 SHARES
VIGNETTE CORPORATION
COMMON STOCK
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INVESTING IN OUR COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
STARTING ON PAGE 5.
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The selling stockholders listed on pages 16-22 are offering and selling
7,971,201 shares of our common stock under this prospectus.
The selling stockholders may offer their Vignette stock through public or
private transactions, on or off the Nasdaq National Market, at prevailing
market prices, or at privately negotiated prices.
Our common stock is traded on The Nasdaq National Market under the symbol
"VIGN." On April 17, 2000, the closing price of the common stock on The Nasdaq
National Market was $46.75 per share, as adjusted for the three-for-one
forward split of our common stock paid on April 14, 2000.
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Neither the Securities and Exchange Commission (the "SEC") nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
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The date of this Prospectus is April 17, 2000
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TABLE OF CONTENTS
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PAGE
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Summary.................................................................... 3
Recent Developments at Vignette............................................ 4
Risk Factors............................................................... 5
Forward-Looking Statements................................................. 14
Use of Proceeds............................................................ 15
Selling Stockholders....................................................... 16
Plan of Distribution....................................................... 23
Legal Matters.............................................................. 24
Experts.................................................................... 24
Where You Can Find More Information........................................ 24
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SUMMARY
You should read this summary together with the more detailed information and
our consolidated financial statements and notes incorporated by reference
herein.
VIGNETTE
We are a leading global provider of e-Business application software products
and services. Our e-Business solutions are designed to enable businesses to
build successful and sustainable online businesses. Our e-Business solutions
allow both traditional brick-and-mortar and startup dot-com businesses to
create and manage Internet business channels that are designed to attract,
engage and retain their customers, partners, and suppliers online. Using our
solutions, our clients build e-Business applications which are focused on
personalized and mass-customized interaction across multiple touchpoints and
communication channels. Since shipping our first products in 1997, we have
received numerous awards for our industry leadership and product capabilities,
including the Crossroads A-list Award and Red Herring Magazine's Top 50 Public
Companies and Best Product Award.
Our V/5 E-Business Platform (also "V/5 Platform" and the "Platform") is an
application platform that provides the business insight, rapid business
reconfiguration and integration across multiple touchpoints required for online
success. By providing a single view across customers, partners, products and
interactions, the Vignette V/5 E-Business Platform provides our customers the
ability to measure the return on investment of all of their online
relationships and initiatives. This allows our customers to drive continuous
improvement by providing measurable, closed-loop execution, interaction and
analysis. The Platform's rapid reconfiguration capabilities not only improve
our customers' time-to-deployment, but just as importantly, their time-to-
adapt, by significantly advancing the starting point for e-Business
applications. Our open and modular architecture makes this possible by allowing
our customers to leverage existing investments and quickly integrate new
technology that is based on industry standards. Finally, the V/5 Platform
allows our customers to stay connected with consumers and partners regardless
of the communication channel, device or touchpoint.
The Vignette V/5 E-Business Platform is built upon a proven, enterprise-ready
architectural foundation that powers some of the largest and most successful e-
Business applications today. It is unique in providing a modular and re-usable
e-Business applications architecture that helps our customers respond and adapt
quickly to changing market demands. It leverages our customers' existing IT
investment in open standards, component models, technical skills and best
practices. The Platform provides a scalable, reliable and high-performance
foundation for delivering content, profiling, and managing interactions across
multiple communication channels such as the web, pagers, mobile phones, and e-
mail.
The V/5 E-Business Platform incorporates the Vignette Application Foundation
(VAF)--an open application framework and methodology for rapidly assembling,
deploying, and managing best-of-breed, componentized e-Business applications.
The VAF enables our customers to reduce their time-to-adapt--the ability to
rapidly reconfigure re-usable applications in response to changing business
needs and market conditions.
We complement our products with a professional services organization that
offers a range of services including strategic planning, project management and
implementation. We designed these services to improve our clients' competitive
position, shorten time-to-market and reduce project implementation risk. We
believe that our ability to successfully deliver an integrated solution to our
clients provides us with a significant competitive advantage in the market for
e-Business software products and services.
We market our products and services globally through our direct sales force,
resellers and systems integrators to businesses seeking to enhance the value of
their Web-based relationships, maximize the return on
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their Internet-related investments and capitalize on the substantial growth of
the Internet as a new marketing and distribution channel. We also leverage
strategic alliances with a number of technology and Internet organizations to
increase the penetration and market acceptance of our e-Business software and
professional services. To date, we have licensed our platform to more than 515
clients worldwide in a variety of industries including retail, financial
services, telecommunications, technology, media and entertainment. Our clients
include American Express, AT&T, Bank One, Charles Schwab and Company, Chicago
Tribune, Lands' End, Merrill Lynch, National Semiconductor, Nokia, Preview
Travel, Siebel Systems, Snap.com, StarMedia Network, Sun Microsystems and
TheStreet.com.
Our principle executive offices are located at 901 South Mopac Expressway,
Austin, Texas 78746 and our telephone number is (512) 306-4300.
RECENT DEVELOPMENTS AT VIGNETTE
On February 15, 2000, we acquired DataSage, Inc. ("DataSage"), a leading
provider of e-marketing and personalization applications that help
organizations create a comprehensive single enterprise-wide view of their
customers. The agreement provides for the issuance of 9,486,000 shares of our
common stock, as adjusted for the three-for-one split paid on April 14, 2000,
in exchange for all the common stock and options of DataSage. We have accounted
for the transaction as a purchase.
On January 18, 2000, we acquired Engine 5, Ltd., a developer of enterprise-
wide Java server technology. The agreement provides for the issuance of 336,507
shares of our common stock, as adjusted for the three-for-one split paid on
April 14, 2000, and approximately $9.2 million in cash in exchange for all the
common stock and options of Engine 5, Ltd. We have accounted for the
transaction as a purchase.
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This Prospectus includes trademarks of Vignette and other corporations.
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RISK FACTORS
You should carefully consider the following risks before making an
investment decision. The risks described below are not the only ones that we
face. Our business, operating results or financial condition could be
materially adversely affected by any of the following risks. The trading price
of our common stock could decline due to any of these risks, and you as an
investor may lose all or part of your investment. You should also refer to the
other information set forth in this report and incorporated by reference
herein, including our financial statements and the related notes.
RISKS RELATED TO OUR BUSINESS
We Expect to Incur Future Losses
We incurred net losses of $3.6 million for the year ended December 31, 1996,
$7.5 million for the year ended December 31, 1997, $26.2 million for the year
ended December 31, 1998, and $42.5 million for the year ended December 31,
1999. As of December 31, 1999, we had an accumulated deficit of $79.8 million.
We have not achieved profitability and we expect to incur net losses for the
foreseeable future. To date, we have primarily funded our operations from the
sale of equity securities and have not generated cash from operations. We
expect to continue to incur significant product development, sales and
marketing, and administrative expenses and, as a result, we will need to
generate significant revenues to achieve and maintain profitability. Although
our revenues have grown significantly in recent quarters, we cannot be certain
that we can sustain these growth rates or that we will achieve sufficient
revenues for profitability. If we do achieve profitability, we cannot be
certain that we can sustain or increase profitability on a quarterly or annual
basis in the future.
Our Limited Operating History Makes Financial Forecasting Difficult
We were founded in December 1995 and thus have a limited operating history.
As a result of our limited operating history, we cannot forecast operating
expenses based on our historical results. Accordingly, we base our expenses in
part on future revenue projections. Most of our expenses are fixed in the
short term and we may not be able to quickly reduce spending if our revenues
are lower than we had projected. Our ability to forecast accurately our
quarterly revenue is limited because our software products have a long sales
cycle that makes it difficult to predict the quarter in which sales will
occur. We would expect our business, operating results and financial condition
to be materially adversely affected if our revenues do not meet our
projections and that net losses in a given quarter would be even greater than
expected.
We Expect Our Quarterly Revenues and Operating Results to Fluctuate
Our revenues and operating results are likely to vary significantly from
quarter to quarter. A number of factors are likely to cause these variations,
including:
. Demand for our products and services;
. The timing of sales of our products and services;
. The timing of customer orders and product implementations;
. Unexpected delays in introducing new products and services;
. Increased expenses, whether related to sales and marketing, product
development or administration;
. Changes in the rapidly evolving market for e-Business applications
solutions;
. The mix of product license and services revenue, as well as the mix of
products licensed;
. The mix of services provided and whether services are provided by our
own staff or third-party contractors;
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. The mix of domestic and international sales; and
. Costs related to possible acquisitions of technology or businesses.
Accordingly, we believe that quarter-to-quarter comparisons of our operating
results are not necessarily meaningful. Investors should not rely on the
results of one quarter as an indication of our future performance.
We plan to increase our operating expenses to expand our sales and marketing
operations, develop new distribution channels, fund greater levels of research
and development, broaden professional services and support and improve
operational and financial systems. If our revenues do not increase along with
these expenses, our business, operating results or financial condition could
be materially adversely affected and net losses in a given quarter would be
even greater than expected.
Although we have limited historical financial data, we believe that our
quarterly operating results may experience seasonal fluctuations. For
instance, quarterly results may fluctuate based on our clients' calendar year
budgeting cycles, slow summer purchasing patterns in Europe and our
compensation policies that tend to compensate sales personnel, typically in
the latter half of the year, for achieving annual quotas.
Our Quarterly Results Often Depend on a Small Number of Large Orders
We derive a significant portion of our software license revenues in each
quarter from a small number of relatively large orders. Although we do not
believe that the loss of any particular customer would have an adverse effect
on our business, our operating results could be materially adversely affected
if we were unable to complete one or more substantial license sales in any
future period. For example, in five of the last twelve quarters in the period
ended December 31, 1999, we had at least one customer that accounted for at
least 10% of total revenue in such quarter.
We Depend on Increased Business from Our Current and New Customers and If We
Fail to Grow Our Customer Base or Generate Repeat Business, Our Operating
Results Could Be Harmed
If we fail to grow our customer base or generate repeat and expanded
business from our current and new customers, our business and operating
results would be seriously harmed. Most of our customers initially make a
limited purchase of our products and services for pilot programs. Many of
these customers may not choose to purchase additional licenses to expand their
use of our products. Many of these customers have not yet developed or
deployed initial applications based on our products. If these customers do not
successfully develop and deploy such initial applications, they may not choose
to purchase deployment licenses or additional development licenses. Our
business model depends on the expanded use of our products within our
customers' organizations.
In addition, as we introduce new versions of our products or new products,
our current customers may not require the functionality of our new products
and may not ultimately license these products. Because the total amount of
maintenance and support fees we receive in any period depends in large part on
the size and number of licenses that we have previously sold, any downturn in
our software license revenue would negatively impact our future services
revenue. In addition, if customers elect not to renew their maintenance
agreements, our services revenue could be significantly adversely affected.
Our Operating Results May Be Adversely Affected By Small Delays in Customer
Orders or Product Implementations
Small delays in customer orders or product implementations can cause
significant variability in our license revenues and operating results for any
particular period. We derive a substantial portion of our revenue from the
sale of products with related services. In these cases, our revenue
recognition policy requires us to substantially complete the implementation of
our product before we can recognize software license revenue, and any end of
quarter delays in product implementation could materially adversely affect
operating results for that quarter.
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In Order to Increase Market Awareness of Our Products and Generate Increased
Revenue We Need to Expand Our Sales and Distribution Capabilities
We must expand our direct and indirect sales operations to increase market
awareness of our products and generate increased revenue. We cannot be certain
that we will be successful in these efforts. We have recently expanded our
direct sales force and plan to hire additional sales personnel. Our products
and services require a sophisticated sales effort targeted at the senior
management of our prospective clients. New hires will require training and
take time to achieve full productivity. We cannot be certain that our recent
hires will become as productive as necessary or that we will be able to hire
enough qualified individuals in the future. We also plan to expand our
relationships with value-added resellers, systems integrators and other third-
party resellers to build an indirect sales channel. In addition, we will need
to manage potential conflicts between our direct sales force and third-party
reselling efforts.
Failure To Maintain The Support Of Third Party e-Business Consultants May
Limit Our Ability To Penetrate Our Markets
A significant portion of our sales are influenced by the recommendations of
our products made by systems integrators, consulting firms and other third
parties that help develop and deploy e-business applications for our clients.
Losing the support of these third parties may limit our ability to penetrate
our markets. These third parties are under no obligation to recommend or
support our products. These companies could recommend or give higher priority
to the products of other companies or to their own products. A significant
shift by these companies toward favoring competing products could negatively
affect our license and service revenue.
Our Lengthy Sales Cycle and Product Implementation Makes It Difficult to
Predict Our Quarterly Results
We have a long sales cycle because we generally need to educate potential
clients regarding the use and benefits of e-Business applications. Our long
sales cycle makes it difficult to predict the quarter in which sales may fall.
In addition, since we recognize the majority of our revenue from product sales
upon implementation of our product, the timing of product implementation could
cause significant variability in our license revenues and operating results
for any particular period. The implementation of our products requires a
significant commitment of resources by our clients, third-party professional
services organizations or our professional services organization, which makes
it difficult to predict the quarter when implementation will be completed.
We May Be Unable to Adequately Develop A Profitable Professional Services
Organization Which Could Affect Both Our Operating Results and Our Ability to
Assist Our Clients With the Implementation of Our Products.
We cannot be certain that we can attract or retain a sufficient number of
the highly qualified services personnel that our business needs and we cannot
be certain that our services business will ever achieve profitability. Clients
that license our software typically engage our professional services
organization to assist with support, training, consulting and implementation
of their Web solutions. We believe that growth in our product sales depends on
our ability to provide our clients with these services and to educate third-
party resellers on how to use our products. As a result, we plan to increase
the number of service personnel to meet these needs. New services personnel
will require training and education and take time to reach full productivity.
To meet our needs for services personnel, we may also need to use more costly
third-party consultants to supplement our own professional services
organization. We expect our services revenue to increase in absolute dollars
as we continue to provide consulting and training services that complement our
products and as our installed base of clients grows. To date, services costs
related to professional services have exceeded, or have been substantially
equal to, professional services-related revenue. Although we expect that our
professional services-related revenue will exceed professional services-
related costs in future periods, we cannot be certain that this will occur. We
generally bill our clients for our services on a "time and materials" basis.
However, from time to time we enter into fixed-price contracts for services.
On occasion, the costs of providing the services have exceeded our fees from
these contracts and, from time to time, we may misprice future contracts to
our detriment. In addition,
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competition for qualified services personnel with the appropriate Internet
specific knowledge is intense. We are in a new market and there is a limited
number of people who have acquired the skills needed to provide the services
that our clients demand.
We May Be Unable To Attract Necessary Third Party Service Providers Which
Could Affect Our Ability To Provide Support, Consulting And Implementation
Services For Our Products
There may be a shortage of third party service providers to assist our
clients the implementation of our products. We do not believe our professional
services organization will be able to fulfill the expected demand for support,
consulting and implementation services for our products. We are actively
attempting to supplement the capabilities of our services organization by
attracting and educating third party service providers and consultants to also
provide these services. We may not be successful in attracting these third
party providers or maintaining the interest of current third party providers.
In addition, these third parties may not devote enough resources to these
activities. A shortfall in service capabilities may affect our ability to sell
our software.
Our Business May Become Increasingly Susceptible to Numerous Risks Associated
With International Operations
International operations are generally subject to a number of risks,
including:
. Expenses associated with customizing products for foreign countries;
. Protectionist laws and business practices that favor local competition;
. Dependence on local vendors;
. Multiple, conflicting and changing governmental laws and regulations;
. Longer sales cycles;
. Difficulties in collecting accounts receivable;
. Foreign currency exchange rate fluctuations; and
. Political and economic instability.
We received 15% of our total revenue in the year ended December 31, 1999,
respectively, through licenses and services sold to clients located outside of
the United States. We expect international revenue to account for a
significant percentage of total revenue in the future and we believe that we
must continue to expand our international sales activities in order to be
successful. Our international sales growth will be limited if we are unable to
establish additional foreign operations, expand international sales channel
management and support organizations, hire additional personnel, customize
products for local markets, develop relationships with international service
providers and establish relationships with additional distributors and third
party integrators. In that case, our business, operating results and financial
condition could be materially adversely affected. Even if we are able to
successfully expand international operations, we cannot be certain that we
will be able to maintain or increase international market demand for our
products.
To date, a majority of our international revenues and costs have been
denominated in foreign currencies. We believe that an increasing portion of
our international revenues and costs will be denominated in foreign currencies
in the future. In addition, although we cannot predict the potential
consequences to our business as a result of the adoption of the Euro as a
common currency in Europe, the transition to the Euro presents a number of
risks, including increased competition from European firms as a result of
pricing transparency. To date, we have not engaged in any foreign exchange
hedging transactions and we are therefore subject to foreign currency risk.
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In Order to Properly Manage Growth, We May Need to Implement and Improve Our
Operational Systems on a Timely Basis
We have expanded our operations rapidly since inception. We intend to
continue to expand in the foreseeable future to pursue existing and potential
market opportunities. This rapid growth places a significant demand on
management and operational resources. In order to manage growth effectively,
we must implement and improve our operational systems, procedures and controls
on a timely basis. If we fail to implement and improve these systems, our
business, operating results and financial condition will be materially
adversely affected.
We May Be Adversely Affected If We Lose Key Personnel
Our success depends largely on the skills, experience and performance of
some key members of our management. If we lose one or more of these key
employees, our business, operating results and financial condition could be
materially adversely affected. In addition, our future success will depend
largely on our ability to continue attracting and retaining highly skilled
personnel. Like other software companies, we face intense competition for
qualified personnel, particularly in the Austin, Texas area. We cannot be
certain that we will be successful in attracting, assimilating or retaining
qualified personnel in the future.
We Have Relied and Expect to Continue to Rely on Sales of Our StoryServer
Product Line for Our Revenue
We currently derive substantially all of our revenues from the license and
related upgrades, professional services and support of our StoryServer
software products. We expect that we will continue to depend on revenue
related to new and enhanced versions of our StoryServer product line for at
least the next several quarters. We cannot be certain that we will be
successful in upgrading and marketing our products or that we will
successfully develop and market new products and services. If we do not
continue to increase revenue related to our existing products or generate
revenue from new products and services, our business, operating results and
financial condition would be materially adversely affected.
Our Future Revenue is Dependent Upon Our Ability to Successfully Market Our
Vignette Syndication Server
We expect that our future financial performance will depend significantly on
revenue from Vignette Syndication Server and the related tools that we plan to
develop, which is subject to significant risks. We began shipping Vignette
Syndication Server to clients in the first quarter of 1999. This is the first
version of a new product designed for a new market opportunity. There are
significant risks inherent in a product introduction such as Vignette
Syndication Server. Market acceptance of Vignette Syndication Server will
depend on a market developing for Internet syndication products and services
and the commercial adoption of standards on which Vignette Syndication Server
is based. We cannot be certain that either will occur. We cannot be certain
that Vignette Syndication Server will meet customer performance needs or
expectations when shipped or that it will be free of significant software
defects or bugs. If Vignette Syndication Server does not meet customer needs
or expectations, for whatever reason, upgrading or enhancing the product could
be costly and time consuming.
If We are Unable to Meet the Rapid Changes in e-Business Applications
Technology Our Existing Products Could Become Obsolete
The market for our products is marked by rapid technological change,
frequent new product introductions and Internet-related technology
enhancements, uncertain product life cycles, changes in client demands and
evolving industry standards. We cannot be certain that we will successfully
develop and market new products, new product enhancements or new products
compliant with present or emerging Internet technology standards. New products
based on new technologies or new industry standards can render existing
products obsolete and unmarketable. To succeed, we will need to enhance our
current products and develop new products on a timely basis to keep pace with
developments related to Internet technology and to satisfy the increasingly
sophisticated requirements of our clients. Internet commerce technology,
particularly e-Business applications technology, is
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complex and new products and product enhancements can require long development
and testing periods. Any delays in developing and releasing enhanced or new
products could have a material adverse effect on our business, operating
results and financial condition.
We Face Intense Competition for e-Business Applications Software Which Could
Make it Difficult to Acquire and Retain Clients Now and in the Future
The Internet software market is intensely competitive. Our clients'
requirements and the technology available to satisfy those requirements
continually change. We expect competition to persist and intensify in the
future.
Our principal competitors include: in-house development efforts by potential
clients or partners; other vendors of software that directly address elements
of e-Business applications, such as BroadVision; and developers of software
that address only certain technology components of e-Business applications
(e.g., content management), such as Interwoven.
Many of these companies, as well as some other competitors, have longer
operating histories and significantly greater financial, technical, marketing
and other resources than we do. Many of these companies can also leverage
extensive customer bases and adopt aggressive pricing policies to gain market
share. Potential competitors such as Netscape and Microsoft may bundle their
products in a manner that may discourage users from purchasing our products.
In addition, it is possible that new competitors or alliances among
competitors may emerge and rapidly acquire significant market share.
Competitive pressures may make it difficult for us to acquire and retain
clients and may require us to reduce the price of our software. We cannot be
certain that we will be able to compete successfully with existing or new
competitors. If we fail to compete successfully against current or future
competitors, our business, operating results and financial condition would be
materially adversely affected.
We Must Successfully Integrate Our Recent Acquisitions of Diffusion, Inc.,
Engine 5, Ltd. and DataSage, Inc.
We acquired Diffusion, Inc., Engine 5, Ltd. and DataSage, Inc. on June 30,
1999, January 18, 2000 and February 15, 2000, respectively. Our failure to
successfully address the risks associated with our acquisitions of these
companies could have a material adverse affect on our ability to develop and
market products based on their respective technologies. In particular, we are
developing integrated products and, accordingly, are devoting significant
resources to product development, sales and marketing. The success of these
acquisitions will depend on our ability to:
. Successfully integrate and manage their operations;
. Retain their key employees; and
. Develop and market products based on the acquired technology.
Potential Future Acquisitions Could Be Difficult to Integrate, Disrupt Our
Business, Dilute Stockholder Value and Adversely Affect Our Operating Results
We may acquire other businesses in the future, which would complicate our
management tasks. We may need to integrate widely dispersed operations that
have different and unfamiliar corporate cultures. These integration efforts
may not succeed or may distract management's attention from existing business
operations. Our failure to successfully manage future acquisitions could
seriously harm our business. Also, our existing stockholders would be diluted
if we financed the acquisitions by issuing equity securities.
The Internet is Generating Privacy Concerns in the Public and Within
Governments, Which Could Result in Legislation Materially and Adversely
Affecting Our Business or Result in Reduced Sales of Our Products, or Both.
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Businesses use our StoryServer product to develop and maintain profiles to
tailor the content to be provided to Web site visitors. Typically, the
software captures profile information when consumers, business customers or
employees visit a Web site and volunteer information in response to survey
questions. Usage data collected over time augments the profiles. However,
privacy concerns may nevertheless cause visitors to resist providing the
personal data necessary to support this profiling capability. More
importantly, even the perception of security and privacy concerns, whether or
not valid, may indirectly inhibit market acceptance of our products. In
addition, legislative or regulatory requirements may heighten these concerns
if businesses must notify Web site users that the data captured after visiting
certain Web sites may be used by marketing entities to unilaterally direct
product promotion and advertising to that user. We are not aware of any such
legislation or regulatory requirements currently in effect in the United
States. Other countries and political entities, such as the European Economic
Community, have adopted such legislation or regulatory requirements. The
United States may adopt similar legislation or regulatory requirements. If
consumer privacy concerns are not adequately addressed, our business,
financial condition and operating results could be materially adversely
affected.
Our StoryServer product uses "cookies" to track demographic information and
user preferences. A "cookie" is information keyed to a specific server, file
pathway or directory location that is stored on a user's hard drive, possibly
without the user's knowledge, but generally removable by the user. Germany has
imposed laws limiting the use of cookies, and a number of Internet
commentators, advocates and governmental bodies in the United States and other
countries have urged passage of laws limiting or abolishing the use of
cookies. If such laws are passed, our business, operating results and
financial condition could be materially adversely affected.
We May Be Adversely Impacted by the Year 2000 and Other Information
Technology Issues
The "Year 2000 Issue" refers generally to the problems that some software
may have in determining the correct century for the year. For example,
software with date-sensitive functions that is not Year 2000 compliant may not
be able to distinguish whether "00" means 1900 or 2000, which may result in
failures or the creation of erroneous results.
We are exposed to the risk that the Year 2000 Issue could disrupt our
operations. However, as discussed in prior filings, we undertook certain
planning and implementation efforts. We did not experience any significant
system failures at the turning of the new millennium. We presently believe
that the Year 2000 Issue has been mitigated. The amounts incurred and expensed
for developing and carrying out the plans to complete the Year 2000
modifications did not have a material effect on our operations. See "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations--Year 2000 Update."
We Develop Complex Software Products Susceptible to Software Errors or
Defects that Could Result in Lost Revenues, or Delayed or Limited Market
Acceptance
Complex software products such as ours often contain errors or defects,
particularly when first introduced or when new versions or enhancements are
released. Despite internal testing and testing by current and potential
customers, our current and future products may contain serious defects,
including Year 2000 errors. Serious defects or errors could result in lost
revenues or a delay in market acceptance, which would have a material adverse
effect on our business, operating results and financial condition.
If We Experienced a Product Liability Claim We Could Incur Substantial
Litigation Costs
Since our clients use our products for mission critical applications such as
Internet commerce, errors, defects or other performance problems could result
in financial or other damages to our clients. They could seek damages for
losses from us, which, if successful, could have a material adverse effect on
our business, operating results or financial condition. Although our license
agreements typically contain provisions designed to limit our exposure to
product liability claims, existing or future laws or unfavorable judicial
decisions could negate such limitation of liability provisions. We have not
experienced any product liability claims to date. However, a product liability
claim brought against us, even if not successful, would likely be time
consuming and costly.
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Our Product Shipments Could Be Delayed if Third Party Software Incorporated
in Our Products is No Longer Available
We integrate third-party software as a component of our software. The third-
party software may not continue to be available to us on commercially
reasonable terms. If we cannot maintain licenses to key third-party software,
such as GroupLens Express, shipments of our products could be delayed until
equivalent software could be developed or licensed and integrated into our
products, which could materially adversely affect our business, operating
results and financial condition.
Our Business is Based on Our Intellectual Property and We Could Incur
Substantial Costs Defending Our Intellectual Property From Infringement or a
Claim of Infringement
In recent years, there has been significant litigation in the United States
involving patents and other intellectual property rights. We could incur
substantial costs to prosecute or defend any such litigation. Although we are
not currently involved in any intellectual property litigation, we may be a
party to litigation in the future to protect our intellectual property or as a
result of an alleged infringement of other's intellectual property, forcing us
to do one or more of the following:
. Cease selling, incorporating or using products or services that
incorporate the challenged intellectual property;
. Obtain from the holder of the infringed intellectual property right a
license to sell or use the relevant technology, which license may not be
available on reasonable terms; and
. Redesign those products or services that incorporate such technology.
We rely on a combination of patent, trademark, trade secret and copyright
law and contractual restrictions to protect our technology. These legal
protections provide only limited protection. If we litigated to enforce our
rights, it would be expensive, divert management resources and may not be
adequate to protect our business.
Anti-Takeover Provisions in Our Charter Documents and Delaware Law Could
Prevent or Delay a Change in Control of Our Company
Certain provisions of our certificate of incorporation and bylaws may
discourage, delay or prevent a merger or acquisition that a stockholder may
consider favorable. Such provisions include:
. Authorizing the issuance of "blank check" preferred stock;
. Providing for a classified board of directors with staggered, three-year
terms;
. Prohibiting cumulative voting in the election of directors;
. Requiring super-majority voting to effect certain amendments to our
certificate of incorporation and bylaws;
. Limiting the persons who may call special meetings of stockholders;
. Prohibiting stockholder action by written consent; and
. Establishing advance notice requirements for nominations for election to
the board of directors or for proposing matters that can be acted on by
stockholders at stockholder meetings.
Certain provisions of Delaware law and our stock incentive plans may also
discourage, delay or prevent someone from acquiring or merging with us.
12
<PAGE>
RISKS RELATED TO THE INTERNET INDUSTRY
Our Performance Will Depend on the Growth of the Internet for Commerce
Our future success depends heavily on the Internet being accepted and widely
used for commerce. If Internet commerce does not continue to grow or grows
more slowly than expected, our business, operating results and financial
condition would be materially adversely affected. Consumers and businesses may
reject the Internet as a viable commercial medium for a number of reasons,
including potentially inadequate network infrastructure, slow development of
enabling technologies or insufficient commercial support. The Internet
infrastructure may not be able to support the demands placed on it by
increased Internet usage and bandwidth requirements. In addition, delays in
the development or adoption of new standards and protocols required to handle
increased levels of Internet activity, or increased government regulation
could cause the Internet to lose its viability as a commercial medium. Even if
the required infrastructure, standards, protocols or complementary products,
services or facilities are developed, we may incur substantial expenses
adapting our solutions to changing or emerging technologies.
Our Performance Will Depend on the New Market for e-Business Applications
Software
The market for e-Business applications software is new and rapidly evolving.
We expect that we will continue to need intensive marketing and sales efforts
to educate prospective clients about the uses and benefits of our products and
services. Accordingly, we cannot be certain that a viable market for our
products will emerge or be sustainable. Enterprises that have already invested
substantial resources in other methods of conducting business may be reluctant
or slow to adopt a new approach that may replace, limit or compete with their
existing systems. Similarly, individuals have established patterns of
purchasing goods and services. They may be reluctant to alter those patterns.
They may also resist providing the personal data necessary to support our
existing and potential product uses. Any of these factors could inhibit the
growth of online business generally and the market's acceptance of our
products and services in particular.
There is Substantial Risk that Future Regulations Could Be Enacted that
Either Directly Restrict Our Business or Indirectly Impact Our Business By
Limiting the Growth of Internet Commerce
As Internet commerce evolves, we expect that federal, state or foreign
agencies will adopt regulations covering issues such as user privacy, pricing,
content and quality of products and services. If enacted, such laws, rules or
regulations could limit the market for our products and services, which could
materially adversely affect our business, financial condition and operating
results. Although many of these regulations may not apply to our business
directly, we expect that laws regulating the solicitation, collection or
processing of personal/consumer information could indirectly affect our
business. The Telecommunications Act of 1996 prohibits certain types of
information and content from being transmitted over the Internet. The
prohibition's scope and the liability associated with a Telecommunications Act
violation are currently unsettled. In addition, although substantial portions
of the Communications Decency Act were held to be unconstitutional, we cannot
be certain that similar legislation will not be enacted and upheld in the
future. It is possible that such legislation could expose companies involved
in Internet commerce to liability, which could limit the growth of Internet
commerce generally. Legislation like the Telecommunications Act and the
Communications Decency Act could dampen the growth in Web usage and decrease
its acceptance as a communications and commercial medium.
The United States government also regulates the export of encryption
technology, which our products incorporate. If our export authority is revoked
or modified, if our software is unlawfully exported or if the United States
government adopts new legislation or regulation restricting export of software
and encryption technology, our business, operating results and financial
condition could be materially adversely affected. Current or future export
regulations may limit our ability to distribute our software outside the
United States. Although we take precautions against unlawful export of our
software, we cannot effectively control the unauthorized distribution of
software across the Internet.
13
<PAGE>
RISKS RELATED TO THE SECURITIES MARKETS
Our Stock Price May Be Volatile
The market price of our common stock has been highly volatile and has
fluctuated significantly in the past. We believe that it may continue to
fluctuate significantly in the future in response to the following factors,
some of which are beyond our control:
. Variations in quarterly operating results;
. Changes in financial estimates by securities analysts;
. Changes in market valuations of Internet software companies;
. Announcements by us of significant contracts, acquisitions, strategic
partnerships, joint ventures or capital commitments;
. Loss of a major client or failure to complete significant license
transactions;
. Additions or departures of key personnel;
. Sales of common stock in the future; and
. Fluctuations in stock market price and volume, which are particularly
common among highly volatile securities of Internet and software
companies.
Our Business May Be Adversely Affected By Class Action Litigation Due to
Stock Price Volatility
In the past, securities class action litigation has often been brought
against a company following periods of volatility in the market price of its
securities. We may in the future be the target of similar litigation.
Securities litigation could result in substantial costs and divert
management's attention and resources, which could have a material adverse
effect on our business, operating results and financial condition.
We May Be Unable to Meet Our Future Capital Requirements
We expect the cash on hand, cash equivalents and commercial credit
facilities to meet our working capital and capital expenditure needs for at
least the next 12 months. After that time, we may need to raise additional
funds and we cannot be certain that we would be able to obtain additional
financing on favorable terms, if at all. Further, if we issue equity
securities, stockholders may experience additional dilution or the new equity
securities may have rights, preferences or privileges senior to those of
existing holders of common stock. If we cannot raise funds, if needed, on
acceptable terms, we may not be able to develop or enhance our products, take
advantage of future opportunities or respond to competitive pressures or
unanticipated requirements, which could have a material adverse effect on our
business, operating results and financial condition.
FORWARD-LOOKING STATEMENTS
This prospectus, including the documents incorporated by reference herein,
contains forward-looking statements that involve risks and uncertainties.
Statements contained in this Prospectus or incorporated by reference herein
that are not purely historical are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 (the "Securities Act")
and Section 21E of the Securities Exchange Act of 1934 (the "1934 Act"),
including statements regarding Vignette's expectations, beliefs, intentions or
strategies regarding the future. All forward-looking statements included in
this document are based on information available to Vignette on the date
hereof, and Vignette assumes no obligation to update any such forward-looking
statements. Vignette's actual results could differ materially from those
anticipated in these forward-looking
14
<PAGE>
statements as a result of certain factors, including, but not limited to,
those set forth in this prospectus under "Risk Factors." You should carefully
consider the risks described in the "Risk Factors" section, in addition to the
other information set forth in this prospectus and incorporated by reference
herein, before making an investment decision.
USE OF PROCEEDS
All net proceeds from the sale of Vignette common stock will go to the
stockholders who offer and sell their shares. Accordingly, Vignette will not
receive any proceeds from the sale of the shares by the selling stockholders.
15
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information, as of March 1, 2000,
with respect to the number of shares of common stock owned by the selling
stockholders named below and as adjusted to give effect to the sale of the
shares offered hereby. These numbers have been adjusted for the three-for-one
forward split of our common stock, in the form of a stock dividend, paid on
April 14, 2000. A portion of the shares held by each selling stockholder are
held in escrow. Based upon 190,911,288 shares of common stock outstanding on
March 1, 2000, as adjusted for the three-for-one split paid on April 14, 2000,
none of the selling shareholders owns more than 1% of our outstanding stock.
The shares are being registered to permit public secondary trading of the
shares, and the selling stockholders may offer the shares for resale from time
to time. See "Plan of Distribution."
The shares being offered by the selling stockholders were acquired from us
in our acquisition of DataSage, Inc., pursuant to an agreement and plan of
reorganization signed on January 4, 2000 and our acquisition of Engine 5,
Ltd., pursuant to an agreement and plan of reorganization dated January 7,
2000. The shares of common stock were issued pursuant to an exemption from the
registration requirements of the Securities Act. The selling stockholders
represented to us that they were acquiring the shares for investment and with
no present intention of distributing the shares.
We have filed with the SEC, under the Securities Act, a registration
statement on Form S-3, of which this prospectus forms a part, with respect to
the resale of the shares from time to time on the Nasdaq National Market or in
privately-negotiated transactions. We have agreed to use our best efforts to
keep such registration statement effective until the earlier of such time as
(i) all the shares have been sold or (ii) all the shares may be sold under
Rule 144 of the Securities Act in any three-month period.
The shares offered by this prospectus may be offered from time to time by
the selling stockholders named below:
<TABLE>
<CAPTION>
SHARES SHARES
BENEFICIALLY BENEFICIALLY
OWNED PRIOR TO OWNED AFTER
OFFERING OFFERING
----------------- NUMBER OF -----------------
NAMES AND ADDRESSES OF SHARES BEING NUMBER OF
SELLING STOCKHOLDERS NUMBER OF PERCENT OFFERED SHARES PERCENT
---------------------- SHARES ------- ------------ --------- -------
<S> <C> <C> <C> <C> <C>
Advanced Technology Ventures 1,486,215 * 1,486,215 0 --
V, LP(1)....................
c/o Michael Frank
Somerset Court
Waltham, MA 02145
One Liberty Fund III, LP(1).. 1,231,782 * 1,231,782 0 --
c/o Duncan McCallum
150 Cambridge Park Drive
Cambridge, MA 02140
Sigma Partners III, LP(1).... 958,167 * 956,751 1,416 *
c/o Marilyn Stallings
2885 Sand Hill Road
Menlo Park, CA 94025
David B. Blundin(1).......... 902,985 * 902,985 0 --
19 Newcrossing Road
Reading, MA 01867
El Dorado Ventures IV, 475,686 * 475,686 0 --
LP(1).......................
c/o Shanda Bahles
2400 Sand Hill Road
Menlo Park, CA 94025
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
SHARES SHARES
BENEFICIALLY BENEFICIALLY
OWNED PRIOR TO OWNED AFTER
OFFERING OFFERING
----------------- NUMBER OF -----------------
NAMES AND ADDRESSES OF SHARES BEING NUMBER OF
SELLING STOCKHOLDERS NUMBER OF PERCENT OFFERED SHARES PERCENT
---------------------- SHARES ------- ------------ --------- -------
<S> <C> <C> <C> <C> <C>
Questmark Partners LP(1)..... 427,701 * 427,701 0 --
c/o Tom Hitchner
One South Street
Baltimore, MD 21202
David Ellenberger(1)......... 294,345 * 294,345 0 --
19 Newcrossing Road
Reading, MA 01867
Sigma Associates III, LP(1).. 236,778 * 236,778 0 --
c/o Marilyn Stallings
2885 Sand Hill Road
Menlo Park, CA 94025
William H. Bender(1)......... 213,939 * 213,939 0 --
19 Newcrossing Road
Reading, MA 01867
Sigma Partners V, LP(1)...... 189,153 * 189,153 0 --
c/o Marilyn Stallings
2885 Sand Hill Road
Menlo Park, CA 94025
Gladys S. Blundin(1)......... 151,920 * 151,920 0 --
85 Carriage Road
Wilton, CT 06897
Michael H. Blundin(1)........ 151,920 * 151,920 0 --
19 Newcrossing Road
Reading, MA 01867
William Blundin(1)........... 147,099 * 147,099 0 --
c/o Bradford Co.
767 Third Ave. (37th Floor)
New York, NY 10017
John Mandile(1).............. 294,834 * 114,834 180,000 *
c/o Sigma
20 Custom House Street
Suite 830
Boston, MA 02110
Eric F. Brown(1)............. 95,439 * 95,439 0 --
8000 Towers Crescent Drive
Suite 1400
Vienna, VA 22182
John F. Lunny(1)............. 75,960 * 75,960 0 --
19 Newcrossing Road
Reading, MA 01867
HLM/CB Fund, LP(1)........... 71,283 * 71,283 0 --
c/o James Mahoney
222 Berkeley Street
Boston, MA 02116
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
SHARES
SHARES BENEFICIALLY BENEFICIALLY
OWNED PRIOR TO OWNED AFTER
OFFERING OFFERING
---------------------- NUMBER OF -----------------
NAMES AND ADDRESSES OF SHARES BEING NUMBER OF
SELLING STOCKHOLDERS NUMBER OF PERCENT OFFERED SHARES PERCENT
---------------------- SHARES -------- ------------ --------- -------
<S> <C> <C> <C> <C> <C>
William Blundin 1995 53,604 * 53,604 0 --
Charitable Remainder
Trust(1)...............
c/o William Blundin
c/o Bradford Co.
767 Third Ave. (37th
Floor)
New York, NY 10017
Sigma Associates V, 52,731 * 52,731 0 --
LP(1)..................
c/o Marilyn Stallings
2885 Sand Hill Road
Menlo Park, CA 94025
Lighthouse Capital Part- 49,074 * 49,074 0 --
ners, III, L.P.(1).....
100 Drake's Landing
Road,
Suite 260
Greenbrae, CA 94904
Advanced Technology Ven- 46,452 * 46,452 0 --
tures(1)...............
Entrepreneurs V, LP
c/o Michael Frank
Somerset Court
Waltham, MA 02145
El Dorado Technology 37,554 * 37,554 0 --
98(1)..................
c/o Shanda Bahles
2400 Sand Hill Road
Menlo Park, CA 94025
Charles Schwab for H. 35,175 * 35,175 0 --
Paumgarten Keough(1)...
Charles Schwab & Co.
Non-Standard Assets
San Francisco, CA 94104
Harald Paumgarten(1).... 34,203 * 34,203 0 --
708 Third Avenue,
Suite 2010
New York, NY 10017
Shanta Puchtler(1)...... 26,586 * 26,586 0 --
22 Cushing Street
Cambridge, MA 02138
Sigma Investors III, 26,349 * 26,349 0 --
LP(1)..................
c/o Marilyn Stallings
2885 Sand Hill Road
Menlo Park, CA 94025
Paul Cataldo(1)......... 22,788 * 22,788 0 --
19 Newcrossing Road
Reading, MA 01867
Guy Bradley(1).......... 19,959 * 19,959 0 --
60 Mill Street
Brookline, MA 02146
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
SHARES
SHARES BENEFICIALLY BENEFICIALLY
OWNED PRIOR TO OWNED AFTER
OFFERING OFFERING
---------------------- NUMBER OF -----------------
NAMES AND ADDRESSES OF SHARES BEING NUMBER OF
SELLING STOCKHOLDERS NUMBER OF PERCENT OFFERED SHARES PERCENT
---------------------- SHARES -------- ------------ --------- -------
<S> <C> <C> <C> <C> <C>
Ken Gardner(1).......... 13,293 * 13,293 0 --
c/o Sagent Technology
800 West El Camino Real
Mountain View, CA 94040
Alexander Graham(1)..... 13,293 * 13,293 0 --
2612 Alma Avenue
Manhattan Beach, CA
90266
Jeffrey Stamen(1)....... 13,293 * 13,293 0 --
6 Conant Road
Weston, MA 02493
Debora Flashcen Revoca- 11,403 * 11,403 0 --
ble Trust(1)...........
c/o David Flashcen
180 Clyde Street
Chestnut Hill, MA 02467
Kevin Hetherington- 8,961 * 8,961 0 --
Young(1)...............
71 Tewksbury Street
Andover, MA 01810
Sigma Investors V, 7,602 * 7,602 0 --
LP(1)..................
c/o Marilyn Stallings
2885 Sand Hill Road
Menlo Park, CA 94025
Row Moriarty(1)......... 7,128 * 7,128 0 --
c/o Cubex Corporation
200 Clarendon Street
Boston, MA 02116
Bonnie Ayer(1).......... 6,075 * 6,075 0 --
RR 1
Hinesburg, VT 05461
Mary Kelliher(1)........ 6,075 * 6,075 0 --
302 Weston Road
Wellesley, MA 02482
Julie A. Kelling(1)..... 6,075 * 6,075 0 --
PO Box 991,
Groton School
Groton, MA 01450
Ted Ashford(1).......... 5,703 * 5,703 0 --
Ashford Capital Manage-
ment
3801 Kennect Pike
Willington-Greenville
Center, DE 19807
Shikar and Eva Gosh(1).. 5,703 * 5,703 0 --
388 Warren Street
Brookline, MA 02146
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
SHARES SHARES
BENEFICIALLY BENEFICIALLY
OWNED PRIOR TO OWNED AFTER
OFFERING OFFERING
-------------- -----------------
NUMBER NUMBER OF
NAMES AND ADDRESSES OF OF SHARES BEING NUMBER OF
SELLING STOCKHOLDERS SHARES PERCENT OFFERED SHARES PERCENT
---------------------- ------ ------- ------------ --------- -------
<S> <C> <C> <C> <C> <C>
Richard Wolpert(1)...... 5,703 * 5,703 0 --
345 Maple Street
Beverly Hills, CA 90210
Jacob Fox Appleton(1)... 4,953 * 4,953 0 --
Amos Tuck School
101 Byrne Hall
Hanover, NH 03755
Scott Healy(1).......... 4,935 * 4,935 0 --
19 Newcrossing Road
Reading, MA 01867
Mike Starkenberg(1)..... 2,850 * 2,850 0 --
555 Anton Boulevard
Costa Mesa, CA 92626
Paul deGive(1).......... 2,751 * 2,751 0 --
c/o Gustin Partners
2276 Washington Street
The Ware Mills
Newton Lower Falls, MA
02462-1452
Kenneth Lamp(1)......... 2,565 * 2,565 0 --
c/o Midwest Drug
619 1/2 8th Street
Fort Madison, IA 52627
Peter Scott Aborn(1).... 1,899 * 1,899 0 --
22 South Street
Wells, VT 05774
Dennis Bender(1)........ 1,899 * 1,899 0 --
110 Whiteface Mountain
Drive
Johnson, VT 05656
Robert Bender(1)........ 1,899 * 1,899 0 --
48 Helen Avenue
South Burlington, VT
05403
Geraldine Huston(1)..... 1,899 * 1,899 0 --
5150 Spear Street
Shelburne, VT 05482
Marie Toro(1)........... 1,899 * 1,899 0 --
RD #1, Box 518
Grand Isle, VT 05458
Johnathan D. Purdy(1)... 1,593 * 1,593 0 --
148 Main Street
Andover, MA 01845
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
SHARES SHARES
BENEFICIALLY BENEFICIALLY
OWNED PRIOR TO OWNED AFTER
OFFERING OFFERING
-------------- -----------------
NUMBER NUMBER OF
NAMES AND ADDRESSES OF OF SHARES BEING NUMBER OF
SELLING STOCKHOLDERS SHARES PERCENT OFFERED SHARES PERCENT
---------------------- ------ ------- ------------ --------- -------
<S> <C> <C> <C> <C> <C>
Mark Smith(1)........... 1,518 * 1,518 0 --
201 North Main Street
West Hartford, CT 06107
David Brandkamp(1)...... 1,422 * 1,422 0 --
40 Oak Grove, #1
East Greenwich, RI
02818
Christine Bodoin(1)..... 1,329 * 1,329 0 --
19 Newcrossing Road
Reading, MA 01867
Donald Spiliotis(1)..... 1,329 * 1,329 0 --
18 Maple Street
Waltham, MA 02453
Douglas E. Gaeth(1)..... 759 * 759 0 --
9 Brimmer Street
Boston, MA 02108
Brendan J. Kitts(1)..... 681 * 681 0 --
10 Rockwell Street
Cambridge, MA 02139
Joseph Rezuke(1)........ 681 * 681 0 --
243 Boston Post Road
Marlboro, MA 01752
April Evans(1).......... 570 * 570 0 --
c/o Advanced Technology
Ventures
Somerset Court
Waltham, MA 02145
Gustin Partners LTD(1).. 567 * 567 0 --
The Ware Mill
Newton Lower Falls, MA
02462
Michael Brenner(1)...... 522 * 522 0 --
c/o Marilyn Brenner
1404 Ferncroft Tower
Danvers, MA 01923
Lucille M. Lengber(1)... 438 * 438 0 --
150 Johnny Cake Street
North Andover, MA 01845
David Fiorillo(1)....... 303 * 303 0 --
2225 West Middlefield
Road
Mountain View, CA 95113
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
SHARES SHARES
BENEFICIALLY BENEFICIALLY
OWNED PRIOR TO OWNED AFTER
OFFERING OFFERING
----------------- NUMBER OF -----------------
NAMES AND ADDRESSES OF SHARES BEING NUMBER OF
SELLING STOCKHOLDERS NUMBER OF PERCENT OFFERED SHARES PERCENT
---------------------- SHARES ------- ------------ --------- -------
<S> <C> <C> <C> <C> <C>
Richard G. Jung(1)...... 282 * 282 0 --
c/o Athena Health
One Moody Street
Waltham, MA 02453
Phil Libin(2)........... 64,362 * 64,362 0 --
c/o Vignette
580 Harris Avenue,
Suite 301
Boston, MA 02118
Andrew McGeachie(2)..... 64,362 * 64,362 0 --
c/o Vignette
580 Harris Avenue,
Suite 301
Boston, MA 02118
Brandon Volbright(2).... 64,362 * 64,362 0 --
c/o Vignette
580 Harris Avenue,
Suite 301
Boston, MA 02118
TOTAL................. 8,152,617 4.3% 7,971,201 181,416 *
</TABLE>
- --------
* Less than 1%
(1) Sixteen percent (16%) of the total shares of common stock listed as owned
by this selling stockholder are held in an escrow account.
(2) Seventy-two percent (72%) of the total shares of common stock listed as
owned by this selling stockholder are held in an escrow account.
22
<PAGE>
PLAN OF DISTRIBUTION
We will receive no proceeds from this offering. The shares offered hereby
may be sold by the selling stockholders from time to time in transactions in
the over-the-counter market, on the Nasdaq National Market, in privately
negotiated transactions, or by a combination of such methods of sale, at fixed
prices which may be changed, at market prices prevailing at the time of sale,
at prices related to prevailing market prices or at negotiated prices. The
selling stockholders may effect such transactions by selling the shares to or
through broker-dealers, and such broker-dealers may receive compensation in
the form of discounts, concessions or commissions from the selling
stockholders and/or the purchasers of the shares for whom such broker-dealers
may act as agents or to whom they sell as principals, or both (which
compensation as to a particular broker-dealer might be in excess of customary
commissions).
In order to comply with the securities laws of certain states, if
applicable, the shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
shares may not be sold unless they have been registered or qualified for sale
in the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
The selling stockholders and any broker-dealers or agents that participate
with the selling stockholders in the distribution of the shares may under
certain circumstances be deemed to be "underwriters" within the meaning of the
Securities Act, and any commissions received by them and any profit realized
on the resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. The selling stockholders
may agree to indemnify such broker-dealers against certain liabilities,
including liabilities under the Securities Act.
Any broker-dealer participating in such transactions as agent may receive
commissions from the selling stockholders (and, if it acts as agent for the
purchase of such shares, from such purchaser). Broker-dealers may agree with
the selling stockholders to sell a specified number of shares at a stipulated
price per Share, and, to the extent such a broker-dealer is unable to do so
acting as agent for the selling stockholders, to purchase as principal any
unsold shares. Brokers-dealers who acquire shares as principal may thereafter
resell such shares from time to time in transactions (which may involve
crosses and block transactions and which may involve sales to and through
other broker-dealers, including transactions of the nature described above) in
the over-the-counter market, on the Nasdaq National Market, in privately
negotiated transactions, or by a combination of such methods of sale, at fixed
prices that may be changed, at market prices prevailing at the time of sale,
at prices related to such prevailing market prices or at negotiated prices,
and in connection with such resales may pay to or receive from the purchasers
of such shares commissions computed as described above.
Under applicable rules and regulations under the 1934 Act, any person
engaged in the distribution of the shares may not simultaneously engage in
market making activities with respect to our Common Stock for a period of two
business days prior to the commencement of such distribution. In addition and
without limiting the foregoing, the selling stockholders will be subject to
applicable provisions of the 1934 Act and the rules and regulations
thereunder, including, without limitation, Rules 10b-6 and 10b-7, which
provisions may limit the timing of purchases and sales of the shares by the
selling stockholders.
The selling stockholders will pay all commissions and other expenses
associated with the sale of shares by them. The shares offered hereby are
being registered pursuant to our contractual obligations, and we have agreed
to bear certain expenses in connection with the registration and sale of the
shares being offered by the selling stockholders. We have not made any
underwriting arrangements with respect to the sale of shares offered hereby.
We can not assure you that the selling shareholders will sell all or any
portion of the securities offered hereby.
23
<PAGE>
LEGAL MATTERS
The legality of the securities offered hereby will be passed upon for
Vignette by Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP,
Austin, Texas.
EXPERTS
Our consolidated financial statements appearing in our Annual Report (Form
10-K) for the year ended December 31, 1999, have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given on the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of DataSage, Inc. appearing in our
Current Report (Form 8-K/A) filed with the Securities and Exchange Commission
on March 30, 2000, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available
to the public from the SEC's website at "http://www.sec.gov."
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the 1934
Act:
1. Annual Report on Form 10-K for the year ended December 31, 1999, filed
on March 30, 2000.
2. Current Report on Form 8-K, filed on February 29, 2000, as amended by
the Amendment to the Current Report on Form 8-K/A, filed on March 30, 2000.
3. Our Registration Statement No. 000-25375 on Form 8-A filed with the
SEC on February 11, 1999, together with all amendments thereto, pursuant to
Section 12 of the 1934 Act in which there is described the terms, rights
and provisions applicable to the Registrant's outstanding Common Stock.
You may request a copy of these filings, at no cost, by calling us at (512)
306-4300 or by writing to us at the following address:
VIGNETTE CORPORATION
901 SOUTH MOPAC EXPRESSWAY
AUSTIN, TEXAS 78746
ATTENTION: INVESTOR RELATIONS
24
<PAGE>
This prospectus is part of a registration statement we filed with the SEC.
You should rely only on the information or representations provided in this
prospectus. We have authorized no one to provide you with different
information. We are not making an offer of these securities in any state where
the offer is not permitted. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the front of the
document.
7,971,201 SHARES
VIGNETTE CORPORATION
COMMON STOCK
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APRIL 17, 2000
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