<PAGE>
================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
BRIO TECHNOLOGY, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
PATRICK BARRY, VENTURE LAW GROUP
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
BRIO TECHNOLOGY, INC.
3460 WEST BAYSHORE ROAD
PALO ALTO, CA 94303
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 12, 1998
The Annual Meeting of Stockholders (the "Annual Meeting") of Brio
Technology, Inc., a Delaware corporation (the "Company"), will be held at the
Hyatt Rickeys, located at 4219 El Camino Real in Palo Alto, California on
Wednesday, August 12, 1998, at 10:00 a.m., local time, for the following
purposes:
1. To elect six (6) directors of the Company to serve until the next Annual
Meeting of Stockholders or until their respective successors are elected
and qualified;
2. To ratify the appointment of Arthur Andersen LLP as the independent
public accountants of the Company for the fiscal year ending March 31,
1999;
3. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
The foregoing items of business, including the nominees for directors, are
more fully described in the Proxy Statement which is attached and made a part
of this Notice.
The Board of Directors has fixed the close of business on Tuesday, July 28,
1998 as the record date for determining the stockholders entitled to notice of
and to vote at the Annual Meeting and any adjournment or postponement thereof.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, whether or not you expect to attend the Annual Meeting in
person, you are urged to mark, date, sign and return the enclosed proxy card
as promptly as possible in the postage-prepaid envelope provided to ensure
your representation and the presence of a quorum at the Annual Meeting. If you
send in your proxy card and then decide to attend the Annual Meeting to vote
your shares in person, you may still do so. Your proxy is revocable in
accordance with the procedures set forth in the Proxy Statement.
By Order of the Board of Directors,
Karen J. Willem
Chief Financial Officer
Palo Alto, California
July 31, 1998
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, DATE, SIGN AND
RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE. IF A QUORUM IS NOT REACHED, THE COMPANY WILL HAVE
THE ADDED EXPENSE OF RE-ISSUING THESE PROXY MATERIALS. IF YOU ATTEND THE
MEETING AND SO DESIRE, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON.
THANK YOU FOR ACTING PROMPTLY.
<PAGE>
BRIO TECHNOLOGY, INC.
3460 WEST BAYSHORE ROAD
PALO ALTO, CA 94303
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors (the "Board") of Brio Technology, Inc., a Delaware
corporation (the "Company"), of proxies in the enclosed form for use in voting
at the Annual Meeting of Stockholders (the "Annual Meeting") to be held at the
Hyatt Rickeys, located at 4219 El Camino Real in Palo Alto, California on
Wednesday, August 12, 1998, at 10:00 a.m., local time, and any adjournment or
postponement thereof.
This Proxy Statement, the enclosed proxy card and the Company's Annual
Report to Stockholders for the fiscal year ended March 31, 1998, including
financial statements, were first mailed to stockholders entitled to vote at
the meeting on or about July 31, 1998.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company, Attention:
Linda Griffiths-Forsyth, a written notice of revocation or a duly executed
proxy bearing a later date, or by attending the Annual Meeting and voting in
person.
RECORD DATE; VOTING SECURITIES
The close of business on Tuesday, July 28, 1998 has been fixed as the record
date (the "Record Date") for determining the holders of shares of Common Stock
of the Company entitled to notice of and to vote at the Annual Meeting. At the
close of business on the Record Date, the Company had approximately 14,346,123
shares of Common Stock outstanding and held of record by approximately 126
stockholders.
VOTING AND SOLICITATION
Each outstanding share of Common Stock on the Record Date is entitled to one
vote on all matters. Shares of Common Stock may not be voted cumulatively.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the Inspector of Elections (the "Inspector") with the assistance of the
Company's transfer agent. The Inspector will also determine whether or not a
quorum is present. The nominees for election as directors at the Annual
Meeting will be elected by a plurality of the votes of the shares of Common
Stock present in person or represented by proxy at the meeting. All other
matters submitted to the stockholders will require the affirmative vote of a
majority of shares present in person or represented by proxy at a duly held
meeting at which a quorum is present as required under Delaware law for
approval of proposals presented to stockholders. In general, Delaware law also
provides that a quorum consists of a majority of the shares entitled to vote
and present in person or represented by proxy. The Inspector will treat
abstentions as shares that are present and entitled to vote for purposes of
determining the presence of a quorum and as negative votes for purposes of
determining the approval of any matter submitted to the stockholders for a
vote. Any proxy which is returned using the form of proxy enclosed and which
is not marked as to a particular item will be voted FOR the election of
directors, FOR ratification of the appointment of the designated independent
public accountants and as the proxy holders deem advisable on other matters
that may come before the meeting, as the case may be with respect to the item
not marked. If a broker indicates on the enclosed proxy or its substitute that
it does not have discretionary authority as to certain shares to vote on a
particular matter ("broker non-votes"), those shares will not be considered as
present with respect to that matter. The Company believes that the tabulation
procedures to be followed by the Inspector are consistent with the general
statutory requirements in Delaware concerning voting of shares and
determination of a quorum.
1
<PAGE>
The solicitation of proxies will be conducted by mail and the Company will
bear all attendant costs. These costs will include the expense of preparing
and mailing proxy solicitation materials for the Annual Meeting and
reimbursements paid to brokerage firms and others for their expenses incurred
in forwarding solicitation materials regarding the Annual Meeting to
beneficial owners of the Company's Common Stock. The Company may conduct
further solicitation personally, telephonically or by facsimile through its
officers, directors and employees, none of whom will receive additional
compensation for assisting with the solicitation.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
GENERAL
The Company currently has authorized six (6) directors. In accordance with
the terms of the Company's Restated Certificate of Incorporation, effective at
the time the Company becomes a Listed Corporation within the meaning of
Section 301.5 of the California Corporation Code, the terms of office of the
Board of Directors will be divided into two classes: Class I, whose term will
expire at the annual meeting of stockholders to be held in 1999, and Class II,
whose term will expire at the annual meeting of stockholders to be held in
2000. The Class I directors (the "Class I Directors") are E. Floyd Kvamme,
Norman L. Vincent and Katherine Glassey, and the Class II directors (the
"Class II Directors") are Yorgen H. Edholm, Bernard J. Lacroute and Mark B.
Weeks. At each annual meeting of stockholders after the Annual Meeting, the
successors to directors whose terms will then expire will be elected to serve
from the time of election and qualification until the second annual meeting
following election. Any additional directorships resulting from an increase in
the number of directors will be distributed among the two classes so that, as
nearly as possible, each class will consist of one-half of the directors.
NOMINEES
At the Annual Meeting, the stockholders will elect six (6) directors, each
to serve until the next annual meeting at which elections of the class of
directors to which such director belongs are held, or, in each case, until
their respective successors are elected and qualified. Accordingly, the Class
I Directors are elected to serve until the annual meeting of stockholders to
be held in 1999, and the Class II Directors are elected to serve until the
annual meeting of stockholders to be held in 2000. In the event any nominee is
unable or unwilling to serve as a director at the time of the Annual Meeting,
the proxies may be voted for the balance of those nominees named and for any
substitute nominee designated by the present Board or the proxy holders to
fill such vacancy, or for the balance of the nominees named without nomination
of a substitute, or the size of the Board may be reduced in accordance with
the Bylaws of the Company. The Board has no reason to believe that any of the
persons named below will be unable or unwilling to serve as a nominee or as a
director if elected.
The names of the Directors, their ages as of April 30, 1998 and certain
other information about them are set forth below:
<TABLE>
<CAPTION>
DIRECTOR
NAME OF DIRECTORS AGE PRINCIPAL OCCUPATION SINCE
----------------- --- -------------------- --------
<C> <C> <S> <C>
Yorgen H. Edholm............ 43 President, Chief Executive Officer 1989
and Chairman of the Board of
Directors
Katherine Glassey........... 40 Executive Vice President, Products 1989
and Services, Chief Technology
Officer and Director
E. Floyd Kvamme(1)(2)....... 60 Director 1995
Bernard J. Lacroute(1)(2)... 54 Director 1995
Norman L. Vincent(1)(2)..... 65 Director 1995
Mark B. Weeks(1)(2)......... 37 Attorney 1998
</TABLE>
- --------
(1)Member of Audit Committee
(2)Member of Compensation Committee
2
<PAGE>
Yorgen H. Edholm is a co-founder of the Company and has been its President,
Chief Executive Officer and Chairman of the Board of Directors since
inception. Prior to founding the Company, Mr. Edholm was a manager with the
Management Consulting Division of Arthur Young & Company in New York (now
Ernst & Young, LLP) where he co-founded the microcomputer-based Decision
Support Systems Group. Before that, Mr. Edholm was a product manager with
Industri Mathematics AB in Stockholm, Sweden. Mr. Edholm holds a M.S. degree
in Computer Science and Applied Mathematics from the School of Physical
Engineering at the Royal Institute of Technology in Stockholm, Sweden and an
M.B.A. degree in Organizational Behavior and International Economics from the
Stockholm School of Economics in Stockholm, Sweden. Mr. Edholm is the spouse
of Katherine Glassey.
Katherine Glassey is a co-founder of the Company and has been its Executive
Vice President, Products and Services and Chief Technology Officer since
January 1997 and has been a director since inception. Prior to joining the
Company, Ms. Glassey established and managed application development and
consulting organizations for Metaphor Computer Systems, Inc. ("Metaphor"), a
decision support hardware and software company. Before joining Metaphor, Ms.
Glassey was a Senior Consultant with the Management Consulting Division of
Arthur Young & Company in New York. During that time, she co-founded the
microcomputer-based Decision Support Systems Group whose charter was to use
personal computers to enable end-users to make decisions based on corporate
data. Ms. Glassey holds a B.S. degree in Operations Research from Cornell
University with a Minor in English Literature. Ms. Glassey is the spouse of
Yorgen H. Edholm.
E. Floyd Kvamme has been a director of the Company since March 1995. He is
currently also a director of Harmonic Lightwaves, Inc., National
Semiconductor, Photon Dynamics, Inc., Power Integrations, Prism Solutions,
TriQuint Semiconductor, Inc., and several privately held companies. He has
been a partner of Kleiner Perkins Caufield & Byers, a venture capital firm,
since 1984. In 1982 he became Executive Vice President of Sales and Marketing
for Apple Computer. While at Apple, his responsibilities included worldwide
sales, marketing, distribution and support. He holds two degrees in Electrical
Engineering; a B.S. degree from the University of California and a M.S. degree
from Syracuse University.
Bernard J. Lacroute has been a director of the Company since March 1995. He
is currently also a director of several privately held companies. Mr. Lacroute
has been a partner with Kleiner Perkins Caufield & Byers since 1989. Prior to
joining Kleiner Perkins Caufield & Byers, Mr. Lacroute held a number of Senior
Executive positions in leading high technology firms including Digital
Equipment Corporation and Sun Microsystems, Inc. Mr. Lacroute holds graduate
degrees in Physics from the University of Grenoble and in Engineering from the
Ecole Nationale Superieure d'lngenieurs, as well as an M.S. degree in
Electrical Engineering from the University of Michigan.
Norman L. Vincent has been a director of the Company since November 1995.
From 1960 until 1995, Mr. Vincent held various positions at State Farm Mutual
Auto Insurance Company ("State Farm") including, most recently, head of the
systems department (Systems Vice President). During part of his tenure at
State Farm, Mr. Vincent was a member of the Research Board, a private
organization of Chief Information Officers. He currently serves on the board
of NeoVista Solutions, Inc. Mr. Vincent holds a degree in Psychology from the
University of Wisconsin, as well as an M.S. and a Ph.D. in Industrial
Psychology from Purdue University.
Mark B. Weeks has been a director of the Company since July 1998. Since June
1994, Mr. Weeks has been a director of Venture Law Group, A Professional
Corporation, a law firm specializing in the representation of emerging
technology companies.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the period from March 31, 1997 through March 31, 1998 (the "last
fiscal year"), the Board met 12 times and no director attended fewer than 75%
of the aggregate number of meetings of the Board and meetings of the
committees of the Board on which he or she served during such time. The Board
has an Audit Committee and a Compensation Committee. The Board does not have a
nominating committee or a committee
3
<PAGE>
performing the functions of a nominating committee. Although there are no
formal procedures for stockholders to nominate persons to serve as directors,
the Board will consider nominations from stockholders, which should be
addressed to Linda Griffiths-Forsyth at the Company's address set forth above.
Prior to the Company's initial public offering in May 1998, matters within the
purview of the Company's Audit and Compensation Committees were considered by
the full Board.
The Audit Committee consists of directors Kvamme, Lacroute, Vincent and
Weeks, four of the Company's non-employee directors, and held no meetings
during the last fiscal year. Its functions are to recommend the engagement of
the firm of certified public accountants to audit the financial statements of
the Company and monitor the effectiveness of the audit effort, the Company's
financial and accounting organization and its system of internal accounting
controls.
The Compensation Committee consists of directors Kvamme, Lacroute, Vincent
and Weeks, and held no meetings during the last fiscal year. Its functions are
to establish and administer the Company's policies regarding executive
salaries and cash and long-term equity incentives. The Compensation Committee
administers the Company's 1992 Stock Option Plan, the 1998 Stock Option Plan,
the 1998 Employee Stock Purchase Plan and the 1998 Directors' Stock Option
Plan.
COMPENSATION OF DIRECTORS
Except for Mr. Vincent, who receives $500 per meeting for his attendance at
meetings of the Board of Directors, the Company does not currently provide
cash compensation to directors for services in such capacity. Directors may,
however, be reimbursed for certain expenses in connection with attendance at
Board and Committee meetings. Employee directors are eligible to participate
in the Company's 1998 Employee Stock Purchase Plan and non-employee directors
are eligible to participate in the 1998 Directors' Stock Option Plan (the
"Directors' Plan"). Under the Directors' Plan, each person who becomes a
nonemployee director of the Company is automatically granted a nonstatutory
stock option to purchase 20,000 shares of Common Stock on the date on which
the optionee first becomes a nonemployee director of the Company. Thereafter,
on the date of each annual meeting of stockholders following which a
nonemployee director is serving on the Board of Directors, each nonemployee
director shall be granted an option to purchase 5,000 shares of Common Stock
if, on such date, he or she has served on the Company's Board of Directors for
at least six months. Messrs. Kvamme, Lacroute and Vincent, who will have
served for more than six months prior to the date of the Annual Meeting, will
each receive options to purchase 5,000 shares of Common Stock under the
Directors' Plan if reelected at the meeting.
RECOMMENDATION OF THE BOARD:
THE BOARD RECOMMENDS A VOTE FOR
THE ELECTION OF ALL NOMINEES NAMED ABOVE.
----------------
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP has served as the Company's independent public
accountants since 1993 and has been appointed by the Board to continue as the
Company's independent public accountants for the fiscal year ending March 31,
1999. In the event that ratification of this selection of independent public
accountants is not approved by a majority of the shares of Common Stock voting
at the Annual Meeting in person or by proxy, the Board will reconsider its
selection of independent public accountants.
4
<PAGE>
A representative of Arthur Andersen LLP is expected to be present at the
Annual Meeting. This representative will have an opportunity to make a
statement and will be available to respond to appropriate questions.
RECOMMENDATION OF THE BOARD:
THE BOARD RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE FISCAL YEAR ENDING MARCH 31, 1999.
----------------
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information that has been provided to the
Company with respect to beneficial ownership of shares of the Company's Common
Stock as of June 30, 1998 for (i) each person who is known by the Company to
own beneficially more than five percent of the outstanding shares of Common
Stock, (ii) each director of the Company, (iii) each of the executive officers
named in the Summary Compensation Table of this Proxy Statement (the "Named
Executive Officers"), and (iv) all directors and executive officers of the
Company as a group.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED(1)
---------------------------
OFFICERS, DIRECTORS AND PRINCIPAL STOCKHOLDERS NUMBER PERCENT(2)
---------------------------------------------- ------------- -------------
<S> <C> <C>
Entities affiliated with
Kleiner Perkins Caufield & Byers(3).............. 3,046,518 21.2%
2750 Sand Hill Road, Suite 250
Menlo Park, CA 94025
Entities affiliated with
Integral Capital Partners(4)..................... 805,147 5.6%
2750 Sand Hill Road
Menlo Park, CA 94025
Yorgen H. Edholm(5)............................... 4,749,996 33.1%
Katherine Glassey(5).............................. 4,749,996 33.1%
Robert W. Currie(6)............................... 111,980 *
Chris M. Grejtak(7)............................... 71,354 *
Karen Willem(8)................................... 20,573 *
E. Floyd Kvamme(9)................................ 3,046,518 21.2%
Kleiner Perkins Caufield & Byers
2750 Sand Hill Road
Menlo Park, CA 94025
Bernard J. Lacroute(10)........................... 3,046,518 21.2%
Kleiner Perkins Caufield & Byers
2750 Sand Hill Road
Menlo Park, CA 94025
Norman L. Vincent(11)............................. 12,500 *
W 332 N5861 Meadowlark Ct.
Nashotah, WI 53058
Mark B. Weeks(12)................................. 22,180 *
c/o Venture Law Group
2800 Sand Hill Road
Menlo Park, CA 94025
All directors and executive officers as a group (9
persons)(13)..................................... 8,035,101 56.0%
</TABLE>
- --------
* Represents beneficial ownership of less than 1% of the Company's Common
Stock.
(1) Except pursuant to applicable community property laws or as indicated in
the footnotes to this table, to the Company's knowledge, each stockholder
identified in the table possesses sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by such
stockholder.
5
<PAGE>
(2) Applicable percentage of ownership for each stockholder is based on
14,346,123 shares of Common Stock outstanding as of June 30, 1998
together with applicable options for such stockholders. Beneficial
ownership is determined in accordance with the rules of the SEC. The
number of shares beneficially owned by a person includes shares of Common
Stock subject to options held by that person that are currently
exercisable or exercisable within 60 days of June 30, 1998. Such shares
issuable pursuant to such options are deemed outstanding for computing
the percentage ownership of the person holding such options but are not
deemed outstanding for the purposes of computing the percentage ownership
of each other person. Unless otherwise indicated, the address of each of
the individuals named above is: c/o Brio Technology, Inc., 3460 West
Bayshore Road, Palo Alto, CA 94303.
(3) Consists of 3,027,100 shares held by Kleiner Perkins Caufield & Byers VII
and 19,418 shares held by KPCB Information Sciences Zaibatsu Fund II. E.
Floyd Kvamme and Bernard J. Lacroute, both directors of the Company, are
limited partners of KPCB VII Associates, the general partner of each of
Kleiner Perkins Caufield & Byers VII and KPCB Information Sciences
Zaibatsu Fund II. Each of Messrs. Kvamme and Lacroute disclaims
beneficial ownership of such shares except to the extent of his pecuniary
interest therein.
(4) Consists of 652,099 shares held by Integral Capital Partners III, L.P.
and 153,048 shares held by Integral Capital Partners International III,
L.P.
(5) Includes 1,627,509 shares held by Mr. Edholm, 542,503 shares held by Ms.
Glassey and 2,500,000 shares held by the Edholm Family Limited
Partnership. Also includes an aggregate of 79,984 shares held in trusts
for the children of which Mr. Edholm and Ms. Glassey are trustees and
have voting power.
(6) Consists of 111,980 shares issuable upon exercise of options exercisable
within 60 days of June 30, 1998.
(7) Includes 21,354 shares issuable upon exercise of options exercisable
within 60 days of June 30, 1998.
(8) Consists of 20,573 shares issuable upon exercise of options exercisable
within 60 days of June 30, 1998.
(9) Consists of 3,027,100 shares held by Kleiner Perkins Caufield & Byers VII
and 19,418 shares held by KPCB Information Sciences Zaibatsu Fund II. E.
Floyd Kvamme, a director of the Company, is a general partner of KPCB VII
Associates, the general partner of each of Kleiner Perkins Caufield &
Byers VII and KPCB Information Sciences Zaibatsu Fund II, shares voting
and dispositive power with respect to the shares held by each such
entity, and disclaims beneficial ownership of such shares in which he has
no pecuniary interest.
(10) Consists of 3,027,100 shares held by Kleiner Perkins Caufield & Byers VII
and 19,418 shares held by KPCB Information Sciences Zaibatsu Fund II.
Bernard J. Lacroute, a director of the Company, is a general partner of
KPCB VII Associates, the general partner of each of Kleiner Perkins
Caufield & Byers VII and KPCB Information Sciences Zaibatsu Fund II,
shares voting and dispositive power with respect to the shares held by
each such entity, and disclaims beneficial ownership of such shares in
which he has no pecuniary interest.
(11) Consists of 12,500 shares issuable upon exercise of options exercisable
within 60 days of June 30, 1998.
(12) Consists of 355 shares held by Mr. Weeks, 6,485 shares held by Venture
Law Group Investments 1995, 2,840 shares held by Venture Law Group
Investments 1997 and 12,500 shares issuable upon exercise of a stock
option held by Venture Law Group, A Professional Corporation. Mr. Weeks
disclaims beneficial ownership of such shares except to the extent of his
pecuniary interest therein.
(13) Includes 166,407 shares issuable upon exercise of stock options
exercisable within 60 days of June 30, 1998.
6
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows the compensation earned by (a) the individual who
served as the Company's Chief Executive Officer during the fiscal year ended
March 31, 1998; (b) the four other most highly compensated individuals who
served as an executive officer of the Company during the fiscal year ended
March 31, 1998; and (c) the compensation received by each such individual for
the Company's preceding fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
-------------------- ------------
SECURITIES
FISCAL SALARY BONUS(1) UNDERLYING
NAME AND PRINCIPAL POSITION YEAR ($) ($) OPTIONS
--------------------------- ------ --------- ---------- ------------
<S> <C> <C> <C> <C>
Yorgen H. Edholm.............. 1998 175,000 44,723 --
President, Chief Executive 1997 160,000 8,000 --
Officer and Chairman of the
Board of Directors
Katherine Glassey............. 1998 145,000 33,542 --
Executive Vice President, 1997 107,500 6,500 --
Products and Services, Chief
Technology Officer and
Director
Robert W. Currie.............. 1998 170,000 108,419(2) --
Executive Vice President and 1997 78,125 18,750(2) 262,500
General Manager, Worldwide
Operations
Chris M. Grejtak.............. 1998 175,000 22,362 25,000
Executive Vice President, 1997 41,843 -- 75,000
Marketing
Karen J. Willem(3)............ 1998 99,519 22,362 87,500
Executive Vice President, 1997 -- -- --
Finance and Operations, and
Chief Financial Officer
</TABLE>
- --------
(1) Includes amounts earned with respect to such individual's performance in
the applicable fiscal year.
(2) Represents sales commission.
(3) Ms. Willem joined the Company in August 1997. Ms. Willem's annualized
salary in the last fiscal year was $150,000.
7
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides certain information with respect to stock
options granted to the Named Executive Officers in the last fiscal year. In
addition, as required by SEC rules, the table sets forth the hypothetical
gains that would exist for the options based on assumed rates of annual
compound stock price appreciation during the option term.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(5)
-------------------------------------------------- ---------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE OR MARKET PRICE
OPTIONS EMPLOYEES IN BASE PRICE ON DATE OF EXPIRATION
NAME GRANTED(1) FISCAL YEAR(2) ($/SH)(3) GRANT(4) DATE 5%($) 10%($)
---- ---------- -------------- ----------- ------------ ---------- ---------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Yorgen H. Edholm -- -- -- -- -- -- --
Katherine Glassey -- -- -- -- -- -- --
Robert W. Currie -- -- -- -- -- -- --
Chris M. Grejtak 25,000 3.5% $1.20 $2.50 06/18/2002 $ 320,977 $ 412,890
Karen Willem 75,000 10.4 2.00 3.50 08/20/2002 902,932 1,178,671
12,500 1.8 6.00 6.00 11/25/2002 100,489 146,445
</TABLE>
- --------
(1) With respect to Mr. Grejtak's option, 1/48 of the total shares vest on
each monthly anniversary of the vesting commencement date. With respect to
Ms. Willem's options, (i) the option to purchase 75,000 shares vests at
the rate of 1/4 of such shares one year from the vesting commencement
date, and 1/48th of the total shares on each monthly anniversary of the
vesting commencement date thereafter and (ii) the option to purchase
12,500 shares vests at the rate of 1/48 of the total shares on each
monthly anniversary of the vesting commencement date. The options expire
five years from the date of grant, or earlier upon termination of
employment.
(2) Based on an aggregate of 723,847 options granted to employees, consultants
and directors during the last fiscal year.
(3) The exercise price per share of each option was equal to the fair value of
the Common Stock on the date of grant as determined in good faith by the
Board of Directors on such date based upon such factors as the purchase
prices paid by investors for shares of the Company's Preferred Stock, the
absence of a trading market for the Company's securities and the Company's
financial outlook and results of operations. Such exercise prices are
significantly lower than prices paid by investors purchasing shares of the
Company's Preferred Stock in transactions taking place approximately
contemporaneously with the grant of such options. In making its
determination as to the exercise price of such options, the Board
considered the fact that the Company's Preferred Stock carried certain
rights, preferences and privileges, including a preference upon
liquidation, sale or merger, enhanced voting rights, and antidilution
rights, and purchasers of such Preferred Stock received additional
contractual rights, including registration rights, information rights and
rights of first offer on new issuances of Company securities.
(4) Represents the deemed fair market value used by the Company for accounting
purposes.
(5) The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by the rules of the SEC. There can be no assurance that the
actual stock price appreciation over the five-year option term will be at
the assumed 5% and 10% levels or at any other defined level. Unless the
market price of the Common Stock appreciates over the option term, no
value will be realized from the option grants made to the Named Executive
Officers. The potential realizable value is calculated by assuming that
the initial public offering price of the Company's Common Stock of $11.00
per share appreciates at the indicated rate for the entire term of the
option and that the option is exercised at the exercise price and sold on
the last day at the appreciated price.
8
<PAGE>
FISCAL YEAR-END OPTION VALUES
The following table sets forth the number of shares covered by stock options
as of the fiscal year ended March 31, 1998, and the value of "in-the-money"
stock options, which represents the positive spread between the exercise price
of a stock option and the market price of the shares subject to such option at
the end of the fiscal year ended March 31, 1998.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT MARCH 31, 1998 MARCH 31, 1998(1)
------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Yorgen H. Edholm............ -- -- -- --
Katherine Glassey .......... -- -- -- --
Robert W. Currie............ 87,240 175,260 $905,577 $1,801,923
Chris M. Grejtak............ 16,146 33,854 158,231 331,769
Karen Willem................ 521 86,979 2,605 734,895
</TABLE>
- --------
(1) Value of unexercised in-the-money options is based on a value of $11.00
per share of the Company's Common Stock, the price to the public in the
Company's initial public offering in May 1998. Amounts reflected are based
on the assumed value minus the exercise price multiplied by the number of
shares acquired on exercise.
Notwithstanding anything to the contrary set forth in any of the Company's
filings under the Securities Act of 1933 or the Securities Exchange Act of
1934 that might incorporate future filings, including this Proxy Statement, in
whole or in part, the following report and the Stock Performance Graph which
follows shall not be deemed to be incorporated by reference into any such
filings.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following is a report of the Compensation Committee of the Board of
Directors (the "Committee") describing the compensation policies applicable to
the Company's executive officers during the fiscal year ended March 31, 1998.
The Committee is responsible for establishing and monitoring the general
compensation policies and compensation plans of the Company, as well as the
specific compensation levels for executive officers. Executive officers who
are also directors have not participated in deliberations or decisions
involving their own compensation. Prior to the Company's initial public
offering in May 1998, matters within the purview of the Compensation Committee
were considered by the full Board.
GENERAL COMPENSATION POLICY
Under the supervision of the Board of Directors, the Company's compensation
policy is designed to attract and retain qualified key executives critical to
the Company's growth and long-term success. It is the objective of the Board
of Directors to have a portion of each executive's compensation contingent
upon the Company's performance as well as upon the individual's personal
performance. Accordingly, each executive officer's compensation package is
comprised of three elements: (i) base salary which reflects individual
performance and expertise, (ii) variable bonus awards payable in cash and tied
to the achievement of certain performance goals that the Board of Directors
establishes from time to time for the Company and (iii) long-term stock-based
incentive awards which are designed to strengthen the mutuality of interests
between the executive officers and the Company's stockholders.
The summary below describes in more detail the factors which the Board of
Directors considers in establishing each of the three primary components of
the compensation package provided to the executive officers.
BASE SALARY
The level of base salary is established primarily on the basis of the
individual's qualifications and relevant experience, the strategic goals for
which he or she has responsibility, the compensation levels at companies
9
<PAGE>
which compete with the Company for business and executive talent, and the
incentives necessary to attract and retain qualified management. Base salary
is adjusted each year to take into account the individual's performance and to
maintain a competitive salary structure. Company performance does not play a
significant role in the determination of base salary.
CASH-BASED INCENTIVE COMPENSATION
Cash bonuses are awarded on a discretionary basis to executive officers on
the basis of their success in achieving designated individual goals and the
Company's success in achieving specific company-wide goals, such as customer
satisfaction, revenue growth, earnings growth, expense control and new product
introductions.
LONG-TERM INCENTIVE COMPENSATION
The Company has utilized its stock option plans to provide executives and
other key employees with incentives to maximize long-term stockholder values.
Awards under this plan by the Board of Directors take the form of stock
options designed to give the recipient a significant equity stake in the
Company and thereby closely align his or her interests with those of the
Company's stockholders. Factors considered in making such awards include the
individual's position in the Company, his or her performance and
responsibilities, and internal comparability considerations.
Each option grant allows the executive officer to acquire shares of Common
Stock at a fixed price per share (the fair market value on the date of grant)
over a specified period of time (up to 10 years). The options typically vest
in periodic installments over a four-year period, contingent upon the
executive officer's continued employment with the Company. Accordingly, the
option will provide a return to the executive officer only if he or she
remains in the Company's service, and then only if the market price of the
Common Stock appreciates over the option term.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Yorgen H. Edholm has served as the Company's President and Chief Executive
Officer since 1989. His base salary for fiscal 1998 was $175,000.
The factors discussed above in "Base Salaries," "Cash-Based Incentive
Compensation" were also applied in establishing the amount of Mr. Edholm's
salary. Significant factors in establishing Mr. Edholm's compensation were the
Company's significant rate and amount of revenue growth, the Company's ability
to hire and retain key employees, and the Company's achievement of certain of
its goals relative to the introduction of new products and expansion into new
markets.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Committee has considered the impact of Section 162(m) of the Internal
Revenue Code adopted under the Omnibus Budget Reconciliation Act of 1993,
which disallows a deduction for any publicly held corporation for individual
compensation exceeding $1 million in any taxable year for the CEO and four
other most highly compensated executive officers, respectively, unless such
compensation meets the requirements for the "performance-based" exception to
Section 162(m). As the cash compensation paid by the Company to each of its
executive officers is expected to be below $1 million and the Committee
believes that options granted under the Company's 1992 Stock Option Plan, 1998
Stock Option Plan, or 1998 Directors' Stock Option Plan to such officers will
meet the requirements for qualifying as performance-based, the Committee
believes that Section 162(m) will not affect the tax deductions available to
the Company with respect to the compensation of its executive officers. It is
the Committee's policy to qualify, to the extent reasonable, its executive
officers' compensation for deductibility under applicable tax law. However,
the Company may from time to time pay compensation to its executive officers
that may not be deductible.
Compensation Committee:
E. Floyd Kvamme
Bernard J. Lacroute
Norman L. Vincent
10
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Compensation Committee of the Board is currently
or has been, at any time since the formation of the Company, an officer or
employee of the Company. No executive officer 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 on the Company's Board or
Compensation Committee.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In June, 1997, the Company issued, in a private placement transaction, an
aggregate of 852,269 shares of Series C Preferred Stock at a purchase price of
$7.04 per share. Each share of Series C Preferred Stock converted into Common
Stock in connection with the Company's initial public offering. The purchasers
of the Series C Preferred Stock included, among others, the following
directors and 5% stockholders of the Company and persons and entities
associated with them:
<TABLE>
<CAPTION>
SHARES OF
SERIES C
INVESTOR(1) PREFERRED STOCK
--------------------------------------------------------- ---------------
<S> <C>
Kleiner Perkins Caufield & Byers VII (E. Floyd Kvamme and
Bernard J. Lacroute)(2)(3).............................. 71,022
Integral Capital Partners(2)(4).......................... 99,431
</TABLE>
- --------
(1) Shares held by affiliated persons and entities have been aggregated.
(2) Holder is a 5% stockholder.
(3) Includes shares held by Kleiner Perkins Caufield & Byers VII and KPCB
Information Sciences Zaibatsu Fund II.
(4) Includes shares held by Integral Capital Partners III, L.P. and Integral
Capital Partners International III, L.P.
In December 1996, Chris Grejtak exercised an option to purchase 50,000
shares of the Company's Common Stock and entered into a Notice of Early
Exercise and Restricted Stock Purchase Agreement with respect to such
exercise. Mr. Grejtak paid the $0.60 exercise price per share of such shares
by delivery of a five year full-recourse promissory note bearing interest at
the rate of 6.31% per annum. The note, which is full-recourse, is secured by
the shares of Common Stock purchased by Mr. Grejtak. The maximum indebtedness
under the note during the year ended March 31, 1998 was $32,403.
In July 1997, the Company loaned Yorgen Edholm $400,000 pursuant to a full-
recourse Secured Promissory Note bearing interest at a rate of 6.07% per
annum. The note was repaid in full in December 1997. The maximum indebtedness
under the note during the nine months ended December 31, 1997 was $408,877. In
June 1994, the Company entered into an agreement with Mr. Edholm providing
that, in the case of involuntary termination, Mr. Edholm will be paid a sum
equal to eighteen months salary, less applicable withholding.
In October 1996, the Company entered into an agreement with Mr. Currie
providing that, in the case of involuntary termination six months prior to or
twelve months after a change in control of the Company, salary will continue
to be paid for a period of six months from the date of termination and all
stock options and restricted stock then held by Mr. Currie will become fully
vested and exercisable.
In August 1997, the Company entered into an agreement with Ms. Willem
providing that, in the case of involuntary termination six months prior to or
twelve months after an acquisition of the Company, the vesting of all of the
stock options and restricted stock then held by Ms. Willem will accelerate as
if an additional year of service had been rendered.
11
<PAGE>
The Company has entered into indemnification agreements with its officers
and directors containing provisions which may require the Company, among other
things, to indemnify its officers and directors against certain liabilities
that may arise by reason of their status or service as officers or directors
(other than liabilities arising from willful misconduct of a culpable nature)
and to advance their expenses incurred as a result of any proceeding against
them as to which they could be indemnified. The Company also intends to
execute such agreements with its future directors and executive officers.
Mr. Weeks, one of the Company's directors, is a director of Venture Law
Group, A Professional Corporation, which serves as corporate and securities
counsel to the Company.
The Company believes that all of the transactions set forth above were in
its best interests. As a matter of policy, the transactions were, and all
future transactions between the Company and its officers, directors, principal
stockholders and affiliates will be approved by a majority of the Board of
Directors, including a majority of the independent and disinterested directors
on the Board of Directors, and will be on terms no less favorable to the
Company than could be obtained from unaffiliated third parties.
12
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return data
for the Company's stock for the period from April 30, 1998 (the date on which
the Company's stock was first registered under Section 12 of the Securities
Exchange Act of 1934, as amended) through June 30, 1998 to the cumulative
return over such period of (i) the Nasdaq National Market Composite Index and
(ii) the S&P Computer Software and Services Index. The graph assumes that $100
was invested on April 30, 1998, the date on which the Company completed the
initial public offering of its Common Stock, in the Common Stock of the
Company and in each of the comparative indices. The graph further assumes that
such amount was initially invested in the Common Stock of the Company at a per
share price of $11.00, the price to which such stock was first offered to the
public by the Company on the date of its initial public offering, and
reinvestment of any dividends. The stock price performance on the following
graph is not necessarily indicative of future stock price performance.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
S&P COMPUTER
SOFTWARE & BRIO
DATE NASDAQ SERVICES INDEX TECHNOLOGY, INC.
<S> <C> <C> <C>
4/30/98 100 100 100
5/07/98 98.219342 94.78899134 143.1818182
5/14/98 99.83676 99.63780646 137.5
5/21/98 97.462013 96.47330269 139.7727273
5/28/98 96.050653 95.8428017 137.5
6/04/98 94.730279 95.31781696 122.7272727
6/11/98 93.649146 95.28109829 108.5227273
6/18/98 94.877463 101.1140044 110.2272727
6/25/98 99.723829 109.8444588 115.9090909
</TABLE>
COMPARISON OF CUMULATIVE TOTAL RETURN *
AMONG THE COMPANY, THE NASDAQ NATIONAL MARKET
COMPOSITE INDEX AND THE S&P COMPUTER SOFTWARE AND SERVICES INDEX
<TABLE>
<CAPTION>
APRIL 30, 1998 JUNE 30, 1998
-------------- -------------
<S> <C> <C>
Brio Technology, Inc............................... $100 $121.59
Nasdaq National Market Composite Index............. 100 101.41
S&P Computer Software and Services Index........... 100 114.28
</TABLE>
* Assumes $100 invested on April 30, 1998 in the Common Stock of the Company
and in each of the comparative indices, including reinvestment of
dividends.
13
<PAGE>
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Proposals of stockholders intended to be presented at the Company's next
Annual Meeting of Stockholders must be received by Karen Willem, Brio
Technology, Inc., 3460 West Bayshore Road, Palo Alto, CA 94303, no later than
March 1, 1999.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors, executive
officers and persons who own more than 10% of the Company's Common Stock
(collectively, "Reporting Persons") to file with the Securities and Exchange
Commission ("SEC") initial reports of ownership and changes in ownership of the
Company's Common Stock. Reporting Persons are required by SEC regulations to
furnish the Company with copies of all Section 16(a) reports they file. To the
Company's knowledge, based solely on its review of the copies of such reports
received or written representations from certain Reporting Persons that no
other reports were required, the Company believes that during its fiscal year
ended March 31, 1998, all Reporting Persons complied with all applicable filing
requirements.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
This Proxy Statement incorporates certain documents of the Company by
reference that are not presented herein or delivered herewith. Such documents
are available to any person, including any beneficial owner, to whom this Proxy
Statement is delivered, upon oral or written request, without charge, directed
to Linda Griffiths-Forsyth, Brio Technology, Inc., 3460 West Bayshore Road,
Palo Alto, CA 94303, (650) 856-8000. In order to ensure timely delivery of the
documents, such requests should be made by August 6, 1998.
OTHER MATTERS
The Board of Directors knows of no other business that will be presented at
the Annual Meeting. If any other business is properly brought before the Annual
Meeting, proxies in the enclosed form will be voted in respect thereof as the
proxy holders deem advisable.
It is important that the proxies be returned promptly and that your shares be
represented. Stockholders are urged to mark, date, execute and promptly return
the accompanying proxy card in the enclosed envelope.
By Order of the Board of
Directors,
Karen J. Willem
Chief Financial Officer
July 31, 1998
Palo Alto, California
14
<PAGE>
1747-PS-98
<PAGE>
APPENDIX A
FORM OF PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF BRIO TECHNOLOGY, INC. FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD AUGUST 12, 1998
The undersigned stockholder of Brio Technology, Inc., a Delaware
corporation, (the "Company") hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and Proxy Statement, each dated July 31, 1998, and
hereby appoints Karen Willem and Tamara MacDuff or either of them, proxies and
attorneys-in-fact, with full power to each of substitution, on behalf and in the
name of the undersigned, to represent the undersigned at the Annual Meeting of
Stockholders of Brio Technology, Inc. to be held at the Hyatt Rickeys, located
at 4219 El Camino Real in Palo Alto, California on Wednesday, August 12, 1998,
at 10:00 a.m., and at any adjournment or postponement thereof, and to vote all
shares of Common Stock which the undersigned would be entitled to vote if then
and there personally present, on the matters set forth below:
1. ELECTION OF DIRECTORS:
___ FOR all nominees listed below (except as indicated).
___ WITHHOLD authority to vote for all nominees listed below.
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THAT NOMINEE'S NAME IN THE LIST BELOW:
Yorgen H. Edholm
Katherine Glassey
E. Floyd Kvamme
Bernard J. Lacroute
Norman L. Vincent
Mark B. Weeks
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR
ENDING MARCH 31, 1999:
____ FOR ____ AGAINST ____ ABSTAIN
and, in their discretion, upon such other matter or matters that may properly
come before the meeting and any postponement(s) or adjournment(s) thereof.
PLEASE SIGN ON REVERSE SIDE AND RETURN IMMEDIATELY
<PAGE>
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED AS FOLLOWS: (1) FOR THE ELECTION OF DIRECTORS; (2) FOR THE
APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE INDEPENDENT PUBLIC ACCOUNTANTS OF THE
COMPANY FOR THE FISCAL YEAR ENDING MARCH 31, 1999; AND AS SAID PROXIES DEEM
ADVISABLE ON SUCH OTHER MATTERS AS MAY COME BEFORE THE MEETING.
_______________________________________ Date:__________________________
Signature
_______________________________________ Date:__________________________
Signature
(This proxy should be marked, dated, signed by the stockholder(s) exactly as his
or her name appears hereon, and returned promptly in the enclosed envelope.
Persons signing in a fiduciary capacity should so indicate. If shares are held
by joint tenants or as community property, both should sign.)
