<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS
[X] Definitive Proxy Statement PERMITTED BY RULE 14A-
6(E)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
BRIO TECHNOLOGY, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------------------------------
(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)(1) 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:
-------------------------------------------------------------------------
<PAGE>
BRIO TECHNOLOGY, INC.
4980 Great America Parkway
Santa Clara, California 95054
---------------
Notice of Annual Meeting of Stockholders
To Be Held August 24, 2000
---------------
The Annual Meeting of Stockholders (the "Annual Meeting") of Brio
Technology, Inc., a Delaware corporation (the "Company"), will be held at the
Network Meeting Center Technology Mart, located at 5201 Great America Parkway,
Suite 122, Santa Clara, California 95054 on Thursday, August 24, 2000, at 10:00
a.m., local time, for the following purposes:
1. To elect three (3) Class II Directors of Brio to serve until the 2002
Annual Meeting of Stockholders or until their respective successors are
elected and qualified;
2. To approve the amendments of Brio's 1998 Stock Option Plan to
increase the aggregate number of shares authorized for issuance under such
plan by 4,000,000 shares to 9,862,087 shares, to amend the plan's evergreen
feature so that it provides that the lesser of 4% of Brio's outstanding
Common Stock or 1,000,000 shares shall automatically become available for
issuance under the plan on the first day of the Company's fiscal years
beginning in 2001, 2002 and 2003, and to increase the annual limit on the
maximum number of shares of Common Stock that can be granted to any
employee under the plan during a fiscal year of the Company by 2,200,000
shares to a total of 3,200,000 shares;
3. To ratify the appointment of Arthur Andersen LLP as the independent
public accountants of the Company for the fiscal year ending March 31,
2001; and
4. 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 Thursday, June 29,
2000 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,
Tamara L. MacDuff
Chief Financial Officer
Santa Clara, California
July 28, 2000
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.
4980 Great America Parkway
Santa Clara, California 95054
----------------
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 ("Brio"), of proxies in the enclosed form for use in voting at the
Annual Meeting of Stockholders (the "Annual Meeting") to be held at the Network
Meeting Center Technology Mart, located at 5201 Great America Parkway, Suite
122, Santa Clara, California 95054 on Thursday, August 24, 2000, at 10:00 a.m.,
local time, and any adjournment or postponement thereof.
This Proxy Statement, the enclosed proxy card and Brio's Annual Report to
Stockholders for the fiscal year ended March 31, 2000, including financial
statements were first mailed to stockholders entitled to vote at the meeting on
or about July 31, 2000.
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 Tamara L. MacDuff, Chief
Financial Officer of Brio Technology, 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 Thursday, June 29, 2000 has been fixed as the
record date (the "Record Date") for determining the holders of shares of Common
Stock of Brio entitled to notice of and to vote at the Annual Meeting. At the
close of business on the Record Date, the Company had approximately 28,160,190
shares of Common Stock outstanding and held of record by approximately 159
registered 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"). 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 the amendments of Brio's 1998 Stock Option Plan, FOR ratification of the
appointment of the designated independent auditors and as the proxy holders
deem advisable on other matters that may come before the
3
<PAGE>
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. Brio believes that the tabulation procedures to be
followed by the Inspector are consistent with the general requirements of
Delaware law concerning voting of shares and determination of a quorum.
The solicitation of proxies will be conducted by mail and Brio 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
Brio's Common Stock. Brio 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.
4
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
General
The Company currently has authorized six (6) directors. Under the terms of
Brio's certificate of incorporation, Brio's board is divided into two classes:
Class I, whose terms will expire at this Annual Meeting to be held in fiscal
2001 and Class II, whose term will expire at the Annual Meeting. Accordingly,
only the Class II directors are standing for reelection at the Annual Meeting.
Messrs. Cline, Kedar, Kvamme and Ms. Glassey have been designated as Class I
directors and Messrs. Edholm, Lacroute and Federman have been designated as
Class II directors. Mr. Federman is not standing for re-election at the Annual
Meeting.
Nominees
At the annual meeting, you will be asked to elect three (3) Class II
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 II Directors are elected to serve until the annual meeting of
stockholders to be held in 2002. 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 Brio.
The names of the directors, their ages as of May 31, 2000 and certain other
information about them are set forth below:
<TABLE>
<CAPTION>
Director
Name of Directors Age Principal Occupation Since Class
----------------- --- -------------------- -------- -----
<C> <C> <S> <C> <C>
Yorgen H. Edholm*.... President and Chief Executive
45 Officer and Director 1989 II **
Katherine Glassey.... 42 Executive Vice President, 1989 I
Products and Services,
Chief Technology Officer and
Director
Ofir J. Kedar........ 43 Chairman of the Board 1999 I
E. Floyd Kvamme...... 61 Director 1995 I
Michael Cline........ 40 Director 1999 I
Bernard J. Lacroute.. 57 Director 1999 II **
</TABLE>
--------
* On July 17, 2000, Mr. Edholm announced his resignation as President and
Chief Executive Officer. Mr. Edholm will be acting President and Chief
Executive Officer until a successor is hired.
** Directors standing for re-election
Yorgen H. Edholm is a co-founder of Brio and has been its President and
Chief Executive Officer since inception. Prior to founding Brio, 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 Industry 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 Brio 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
5
<PAGE>
founding Brio, Ms. Glassey established and managed application development and
consulting organizations for Metaphor Computer Systems, Inc., a decision
support hardware and software company. Before joining Metaphor, she 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.
Ofir J. Kedar became a director of Brio in August 1999. He is the co-founder
of SQRIBE Technologies Corp. (SQRIBE), which merged with Brio in August 1999.
He became SQRIBE's chairman and chief executive officer in 1993. Before joining
SQRIBE, he was the general manager of the current Oracle Corporation subsidiary
in Israel from 1985 to 1987. He serves on the board of directors of several
high technology companies including A2i, Inc., a provider of high-end catalog
solutions for Internet and CD-ROM order entry systems. Mr. Kedar holds a
bachelor's degree in computer science from Hebrew University in Jerusalem,
Israel.
Michael Cline became a director of Brio in August 1999. Prior to that, he
was a director of SQRIBE since 1995. He is a managing member of Accretive
Technology Partners LLC, a private investment company. He is a director of
Manugistics Group, Inc., FirePond and several private companies in the
information technology industry. He holds a B.S. in Business from Cornell
University and a M.B.A. from Harvard Business School.
E. Floyd Kvamme has been a director of Brio since March 1995. He is
currently also a director of Harmonic, Inc., National Semiconductor, Photon
Dynamics, Inc., Power Integrations, as well as several private 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. Previously, he held senior management positions at National
Semiconductor. He holds two degrees in Electrical Engineering; a B.S. from the
University of California and a M.S. from Syracuse University.
Bernard J. Lacroute has been a director of Brio 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. in Electrical
Engineering from the University of Michigan.
Meetings and Committees of the Board of Directors
During the period from March 31, 1999 through March 31, 2000 (the "last
fiscal year"), the board met eight (8) times. Except for Mr. Federman who
attended 3 meetings of the board, 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 serves. The board has an audit committee and a
compensation committee. The board does not have a nominating committee or a
committee 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 Tamara L. MacDuff at the Company's address set forth above.
In the last fiscal year, the audit committee consisted of directors Lacroute
and Cline, two of Brio's non-employee directors, and held four (4) meetings.
The audit committee currently consists of Messrs. Lacroute, Cline and Kvamme.
The audit committee functions are to monitor the corporate financial reporting
and the internal and external audits of Brio, to provide the Board the results
of its examinations and recommendations derived therefrom, to outline to the
Board improvements made, or to be made, in internal accounting controls, to
nominate independent auditors, to supervise the finance function of Brio (which
includes, among other
6
<PAGE>
matters, Brio's investment activities) and to provide the Board such additional
information and materials as it may deem necessary to make the Board aware of
significant financial matters which require Board attention.
In the last fiscal year, the compensation committee consisted of directors
Kvamme and Federman, and held one (1) meeting. Following the annual meeting
Brio anticipates that the compensation committee will consist of Messrs. Kvamme
and Cline. The compensation committee's functions are to establish and
administer Brio's policies regarding executive salaries and cash and long-term
equity incentives. The compensation committee administers Brio's 1998 stock
option plan, the 1998 employee stock purchase plan and the 1998 directors'
stock option plan.
Compensation of Directors
Brio 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 Brio'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 non-employee director of Brio is automatically granted a non-
statutory stock option to purchase 20,000 shares of Common Stock on the date on
which the optionee first becomes a non-employee director of Brio. Thereafter,
on the date of each annual meeting of stockholders following which a non-
employee director is serving on the Board of Directors, each non-employee
director shall be granted an option to purchase 5,000 shares of Common Stock
if, on such date, he or she has served on Brio's Board of Directors for at
least six months. Messrs. Kedar, Kvamme and Cline, 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. Mr.
Lacroute, who will have served for more than six months prior to the date of
the annual meeting, will 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
APPROVAL OF AMENDMENTS TO BRIO'S 1998 STOCK OPTION PLAN
At the Annual Meeting, you are being asked to approve three amendments to
the Brio 1998 Stock Option Plan. The first two amendments relate to increasing
the number of shares of Common Stock available for issuance under the plan. The
third amendment relates to the annual limitation on the number of shares that
may be issued to any employee under the plan. The following summarizes these
amendments and the material terms of the 1998 Stock Option Plan.
Proposed Amendments
As of March 31, 2000, the current number of shares of Common Stock reserved
for issuance under the 1998 Stock Option Plan is 5,262,087 shares. You are
being asked to approve an increase in the number of shares of common stock
reserved for issuance under the plan by 4,000,000 shares. In addition, you are
being asked to approve an amendment to the plan's "evergreen" feature which
automatically adds more shares to the plan each year on a set formula.
Currently, the plan's evergreen feature automatically adds to the plan on April
1 of each of 1999, 2000 and 2001 an amount equal to the lesser of 600,000
shares or 3% of the outstanding common stock on the preceding March 31. The
amendment for which approval is being sought would restructure this evergreen
feature so that an amount equal to the lesser of 1,400,000 shares or 4% of the
outstanding common stock on the preceding March 31 would be added to the plan
on April 1 of each of 2001, 2002 and 2003. The board of directors approved
these amendments in July 2000 and you are being asked to approve them at the
Annual Meeting. All share numbers described in this paragraph will be adjusted
in the event Brio undertakes a stock split, stock dividend or certain other
similar corporate transactions.
7
<PAGE>
As a result of both of these amendments to the plan, the maximum aggregate
number of additional shares that could become available for issuance under the
plan will be 6,400,000 shares.
The third plan amendment you are being asked to approve relates to the
annual limitation on the number of shares that may be issued to employees under
the 1998 Stock Option Plan. Previously, the plan provided that the maximum
number of shares of Common Stock subject to awards that may be issued to any
employee during a fiscal year could not exceed 1,000,000 shares. The Company
faces an extremely competitive labor market, particularly the market for top-
level executive officers. In light of these and other factors affecting the
Company's business, the Company believes it is appropriate to increase this
annual limit from 1,000,000 shares to 3,200,000 shares per fiscal year in order
to allow the Company to attract and retain qualified individuals for key
management positions with the Company. This number will be adjusted in the
event Brio undertakes a stock split, stock dividend or certain other similar
corporate transactions.
Brio believes that long-term equity compensation in the form of stock
options is critical in order to attract qualified employees to Brio and to
retain and provide incentives to current employees, particularly in light of
the increasingly competitive environment for talented personnel. As of March
31, 2000, options to purchase 3,520,863 shares were outstanding under the plan,
187,796 shares had been issued pursuant to the exercise of options granted
under the plan and 1,553,428 shares remained available for future grants. The
board believes that the number of shares currently available under the plan is
likely to be insufficient in light of potential continued growth in Brio's
operations, including potential increases in the number of employees if and to
the extent Brio completes acquisitions of other companies or businesses. For
this reason, the board of directors has determined that it is in the best
interests of Brio to increase the number of shares available for issuance under
the stock plan as described above.
Description of the 1998 Stock Option Plan
The following is a summary of the principal features of the plan, but it is
not intended to be a detailed description of all of the terms and provisions of
the plan. A copy of the plan will be furnished to any shareholder upon written
request to Brio's Chief Financial Officer at Brio's principal executive offices
in Santa Clara, California.
The plan was adopted by the board of directors in February 1998 and approved
by the stockholders in April 1998. A total of 2,250,000 shares of common stock
was initially reserved for issuance under the plan, plus an automatic annual
increase on the first day of each of Brio's fiscal years in 1999, 2000 and 2001
equal to the lesser of 600,000 shares or 3% of the shares outstanding on the
last day of the immediately preceding fiscal year.
The plan is not a tax-qualified deferred compensation plan under Section
401(a) of the Code, and is not subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended.
During the year ended March 31, 2000, three (3) of Brio's current executive
officers received grants under the plan of options to purchase 260,000 shares
of common stock of Brio of which 140,000 shares were granted to John Schroeder,
Executive Vice President, Products and Services, 60,000 shares granted to Scott
Chalmers, Executive Vice President, Worldwide Sales Operations and 60,000
shares granted to Tamara L. MacDuff, Executive Vice Presdient, Finance and
Operations and Chief Financial Officer; no option grants were made to Brio's 5
current directors who are not executive officers; and all other 570 Brio
employees, including current officers who are not executive officers, received
grants of options to purchase an aggregate of 2,948,498 shares of common stock.
The closing price of the common stock on March 31, 2000 was $37.75 per share.
The plan is administered by the board of directors or by a committee of the
board of directors. The compensation committee has the exclusive authority to
grant stock options and otherwise administer the plan with respect to the
officers and directors.
The plan provides that either incentive stock options or nonstatutory stock
options may be granted to employees, including officers and directors, of Brio
or any of its subsidiaries or affiliates, including an entity in
8
<PAGE>
which Brio owns any equity interest, provided, however, that employees of an
affiliate are not eligible to receive incentive stock options. In addition, the
plan provides that nonstatutory stock options may be granted to consultants,
including directors who are not employees of Brio, or any of its subsidiaries
or affiliates. The board of directors or the compensation committee selects the
optionees and determines the number of shares to be subject to each option. In
making such determination, a number of factors are taken into account,
including the duties and responsibilities of the optionee, the value of the
optionee's services to Brio, the optionee's present and potential contribution
to the success of Brio, and other relevant factors. As of March 31, 2000, there
were approximately 583 employees, officers, consultants and directors eligible
to receive grants under the plan.
Subject to adjustment as provided in the plan, the maximum number of shares
subject to awards that may be granted to any one employee during a fiscal year
under the plan was originally 1,000,000 shares. You are being asked to approve
an amendment to this limit to provide that the maximum annual limit on the
number of shares be increased to 3,200,000 shares. This number will be adjusted
in the event Brio undertakes a stock split, stock dividend or certain other
similar corporate transactions. Brio believes that it is necessary to increase
this limit in order for the Company to attract and retain qualified persons for
senior management positions. Stockholder approval of this amendment is required
for awards granted under the plan to qualify as "performance-based"
compensation under Internal Revenue Code 162(m). See "Compensation Committee
Report on Executive Compensation--Deductibility of Executive Compensation."
Each option is evidenced by a stock option agreement between Brio and the
optionee which contains terms and conditions not inconsistent with the plan as
determined by the board of directors or its committee.
Incentive stock options granted under the plan must have an exercise price
of at least 100% of the fair market value of the common stock on the date of
grant (or 110% of fair market value in the case of an incentive stock option
granted to a holder of more than 10% of the total voting power of all classes
of our stock). Nonstatutory stock options must have an exercise price of at
least 85% of the fair market value of the common stock on the date of grant,
although generally nonstatutory stock options granted to the Company's Chief
Executive Officer or one of its four other most highly compensated officers
will generally equal at least 100% of the grant date fair market value. Payment
of the option exercise may be made in cash, through a cashless, brokered
exercise program or with any other consideration determined by the
administrator and allowed under the plan. The stock option agreement also sets
forth the term of each option, which cannot exceed 10 years (or 5 years in the
case of an incentive stock option granted to a holder of more than 10% of the
total voting power of all classes of our stock). Generally, an option is
nontransferable other than by will or the laws of descent and distribution, and
may be exercised during the lifetime of the optionee only by such optionee. In
certain circumstances, the administrator has the discretion to grant
nonstatutory stock options with limited transferability rights. Stock options
are generally subject to vesting, meaning that the optionee earns the right to
exercise the option over a specified period of time only if he or she continues
to provide services to the Company over that period.
In the event any change, such as a stock split or dividend, is made in
Brio's capitalization that results in an increase or decrease in the number of
outstanding shares of common stock without receipt of consideration by Brio,
appropriate adjustment shall be made in the exercise price of each outstanding
option, the number of shares subject to each option, the annual limitation on
grants to employees, as well as the number of shares available for issuance
under the plan and the fixed number in the plan's evergreen formula. In the
event of the proposed dissolution or liquidation of Brio, each option will
terminate unless otherwise provided by the board of directors or its committee.
In the event of a merger of Brio with or into another corporation or a sale of
all or substantially all of Brio's assets, each option will be assumed or an
equivalent right substituted by the successor corporation unless the board of
directors or its committee determines that the option shall be fully
exercisable prior to the date of the transaction, in which case outstanding
options would terminate upon the closing of the transaction.. The board of
directors has the power to amend or terminate the plan as long as such action
does not adversely affect any outstanding options. Stockholder approval of plan
amendments will be obtained as required by applicable law.
9
<PAGE>
United States Federal Income Tax Information
Options granted under the plan may be either "incentive stock options," as
defined in Section 422 of the Internal Revenue Code, or nonstatutory stock
options.
The recipient of an incentive stock option does not incur ordinary taxable
income at the time of grant or exercise of the option. However, the optionee
may incur alternative minimum tax upon exercise of the option. Brio is not
entitled to a tax deduction at the time of exercise of an incentive stock
option regardless of the applicability of the alternative minimum tax. Upon the
sale or exchange of the shares at least one year after exercise of the option
by the optionee and two years after grant of the incentive stock option, any
gain is treated as long-term capital gain. If these holding periods are not
satisfied, the optionee recognizes ordinary taxable income equal to the lesser
of the fair market value at the time of exercise or the sell price over the
exercise price. In this case, Brio receives a tax deduction for the amount of
ordinary taxable income recognized. In turn, any gain to the optionee in excess
of the ordinary income from a disposition which does not meet the statutory
holding period requirements is long-term capital gain if the sale occurs more
than one year after exercise or short-term capital gain if the sale occurs less
than one year after the exercise. The current federal tax rate on long-term
capital gain is capped at 20%.
Options that do not qualify as incentive stock options are nonstatutory
stock options. An optionee does not recognize taxable income at the time of
grant of a nonstatutory stock option. However, upon exercise, the optionee does
recognize ordinary taxable income equal to the excess of the fair market value
of the shares at time of exercise over the exercise price. The income
recognized by an optionee who is also an employee of Brio is subject to income
tax withholding. Brio is entitled to a tax deduction for the amount of the
ordinary income recognized by the optionee. Upon resale of such shares by the
optionee, any difference between the sale price and the optionee's tax basis--
exercise price plus the income recognized upon exercise--is treated as capital
gain or loss.
Recommendation of the Brio Board of Directors:
THE BRIO BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APROVAL OF
THE AMENDMENTS TO THE 1998 STOCK OPTION PLAN AS DESCRIBED ABOVE.
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP has served as Brio's independent public accountants
since 1993 and has been appointed by the Board to continue as Brio's
independent public accountants for the fiscal year ending March 31, 2001. 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.
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 BRIO BOARD RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF
ARTHUR ANDERSEN LLP AS BRIO'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL
YEAR ENDING MARCH 31, 2001.
10
<PAGE>
BRIO COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information that has been provided to Brio
with respect to beneficial ownership of shares of Brio's Common Stock as of May
31, 2000:
. each person who is known by Brio to own beneficially more than five
(5) percent of the outstanding shares of common stock;
. each director of Brio;
. Brio's Chief Executive Officer and Brio's four most highly
compensated executive officers; and
. all directors and executive officers of Brio as a group.
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 as of May 31, 2000. Such shares issuable pursuant to
such options are deemed outstanding for computing the percentage ownership of
the person holding the options but are not deemed outstanding for the purposes
of computing the percentage ownership of each other person. Percentages marked
with an asterisk (*) represent less than 1 percent ownership.
Unless otherwise indicated, the address of each of the individuals named
above is: c/o Brio Technology, Inc., 4980 Great America Parkway, Santa Clara,
California 95054.
<TABLE>
<CAPTION>
Shares of Common
Stock
Beneficially
Owned
-----------------
Officers, Directors and Principal Stockholders Number Percent
---------------------------------------------- --------- -------
<S> <C> <C>
Yorgen H. Edholm.............................................. 4,684,996 16.7%
Katherine Glassey............................................. 4,684,996 16.7%
Ofir Kedar.................................................... 3,228,146 11.4%
Entities affiliated with...................................... 2,347,259 8.3%
General Atlantic Partners
3 Pickwick Plaza #200
Greenwich, CT 06830
Entities affiliated with...................................... 1,571,563 5.6%
Kleiner Perkins Caufield & Byers
2750 Sand Hill Road, Suite 250
Menlo Park, CA 94025
Bernard J. Lacroute........................................... 1,571,563 5.6%
Kleiner Perkins Caufield & Byers
2750 Sand Hill Road
Menlo Park, CA 94025
E. Floyd Kvamme............................................... 1,571,563 5.6%
Kleiner Perkins Caufield & Byers
2750 Sand Hill Road
Menlo Park, CA 94025
John Schroeder................................................ 223,860 *
Scott Chalmers................................................ 130,955 *
Tamara L. MacDuff............................................. 44,116 *
Charles Federman.............................................. 14,223 *
BRM Group, Inc.
400 Kelby Street, 16th Floor
Fort Lee, NJ 07024
Michael Cline................................................. -- --
All directors and executive................................... 9,946,163 34.7%
officers as a group (7 directors and 3 officers)
</TABLE>
11
<PAGE>
The entries in this table for Yorgen Edholm and Katherine Glassey include
2,105,012 shares held by the Edholm Family Rev Trust and 2,500,000 shares held
by the Edholm Family Limited Partnership. The entries also include 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.
The entry in this table for Ofir Kedar includes 2,518,391 shares held by
Ofir Kedar, 365,958 shares held in trusts for the children of which Mr. Kedar
is trustee and has voting power and 343,797 shares held in escrow pursuant to
the Agreement and Plan of Merger, as amended, among Brio Technology, Inc.,
Socrates Acquisition Corporation and SQRIBE Technologies, Corp.
The entries in this table for each of Messrs. Kvamme and Lacroute and for
entities affiliated with Kleiner Perkins Caufield & Byers (KPCB) consists of
1,503,841 shares held by KPCB VII, 19,418 shares held by KPCB Information
Sciences Zaibatsu Fund II, 15,906 shares held by Mr. Kvamme and 32,398 shares
held by Mr. Lacroute. Both Mr. Kvamme and Mr. Lacroute are directors of Brio
and are general partners of KPCB VII Associates 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.
The entry in this table for entities affiliated with General Atlantic
Partners LLC (GAP LLC) consists of 259,253 shares held by GAP Coinvestment
Partners LP (GAPCO), 1,067,865 shares held by GAP 18 LP, 693,157 shares held by
GAP 43 LP and 326,984 shares held in escrow pursuant to the Agreement and Plan
of Merger, as amended, among Brio Technology, Inc., Socrates Acquisition
Corporation and SQRIBE Technologies, Corp. The general partner of GAPCO, GAP 18
LP and GAP 43 LP is GAP LLC and the managing members of GAP LLC are also the
general partners of GAPCO.
The entry for John Schroeder consists of 193,138 shares held by Mr.
Schroeder and 30,722 shares held in escrow pursuant to the Agreement and Plan
of Merger, as amended, among Brio Technology, Inc., Socrates Acquisition
Corporation and SQRIBE Technologies, Corp.
The entry in this table for Messr. Federman consists of 12,943 shares held
by The BRM Group, Inc. and 1,280 shares held in escrow pursuant to the
Agreement and Plan of Merger, as amended, among Brio Technology, Inc., Socrates
Acquisition Corporation and SQRIBE Technologies, Corp. Mr. Federman is a
director of Brio and is a general partners of The BRM Group, Inc. Messr.
Federman disclaims beneficial ownership of such shares except to the extent of
his pecuniary interest therein.
Except pursuant to applicable community property laws or as indicated in the
footnotes to this table, to Brio'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 that stockholder. Applicable
percentage of ownership for each stockholder is based on 28,092,791 shares of
common stock outstanding as of May 31, 2000 with applicable options for the
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 March 31, 2000. Such shares issuable pursuant to
such options are deemed outstanding for computing the percentage ownership of
the person holding the 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., 4980 Great America Parkway, Santa Clara,
California 95054.
12
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows the compensation earned by:
. the individual who served as Brio's Chief Executive Officer during the
fiscal year ended March 31, 2000;
. the four other most highly compensated individuals who were serving as an
executive officer as of March 31, 2000, the fiscal year-end; and
. the compensation received by each of the individuals referenced above for
Brio's preceding fiscal year. The bonus includes amounts earned with
respect to the individual's performance in the applicable fiscal year.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Annual Compensation Awards
------------------- ------------
Securities
Fiscal Salary Bonus Underlying
Name and Principal Position Year ($) ($) Options
--------------------------- ------ ------------------- ------------
<S> <C> <C> <C> <C>
Yorgen H. Edholm....................... 2000 220,000 105,609 --
President, Chief Executive Officer and 1999 200,000 91,161 --
Director 1998 175,000 44,723 --
Katherine Glassey...................... 2000 190,000 62,105 --
Executive Vice President, Products and 1999 170,000 54,697 --
Services, 1998 145,000 33,542 --
Chief Technology Officer and Director
Scott Chalmers*........................ 2000 200,000 77,455 60,000
Executive Vice President, Worldwide 1999 140,000 45,427 226,438
Sales 1998 -- -- --
Operations
John Schroeder**....................... 2000 200,000 71,000 140,000
Executive Vice President, Products and 1999 200,000 59,000 --
Services 1998 165,000 40,634 228,711
Tamara MacDuff......................... 2000 190,000 36,083 60,000
Executive Vice President, Finance and 1999 114,000 19,619 25,000
Operations, and Chief Financial 1998 100,000 16,366 2,500
Officer
</TABLE>
--------
* Mr. Chalmers joined Brio in August 1999 in connection with Brio's merger
with SQRIBE Technologies, Corp. Mr. Chalmers joined SQRIBE in fiscal 1999.
** Mr. Schroeder joined Brio in August 1999 in connection with Brio's merger
with SQRIBE Technologies, Corp. Mr. Schroeder joined SQRIBE in fiscal 1997.
Mr. Schroeder resigned as Executive Vice President, Products and Services
and terminated on July 21, 2000.
13
<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. No stock appreciation rights
were granted to these individuals during the year.
The percentages below are based on a total of 3,208,498 options granted by
Brio during the year ended March, 31 2000 to employees of Brio, including the
executive officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
Potential Realizable
Value At Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants For Option Term
------------------------------------------------- ---------------------
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 Fiscal Year ($/Sh) Grant Date 5% ($) 10% ($)
---- ---------- ------------- ----------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Yorgen H. Edholm........ -- -- -- -- -- -- --
Katherine Glassey....... -- -- -- -- -- -- --
Scott Chalmers.......... 30,000 0.9% $13.56 $13.56 9/2/09 $ 112,391 $ 276,088
30,000 0.9% 33.31 33.31 3/21/10 248,355 610,083
John Schroeder.......... 40,000 1.2% 19.50 19.50 8/3/09 490,538 2,692,298
100,000 3.1% 42.81 42.81 1/25/10 1,243,119 6,822,811
Tamara L. MacDuff....... 20,000 0.6% 12.50 12.50 4/20/09 69,070 152,628
15,000 0.4% 13.56 13.56 9/2/09 56,196 124,178
25,000 0.7% $29.75 $29.75 2/18/10 $ 205,484 $ 454,067
</TABLE>
The exercise price per share of each option was equal to the fair market
value of the common stock on the date of grant based upon the closing stock
price of Brio's common stock on the Nasdaq Stock Market on the date of grant.
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 ten-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.
14
<PAGE>
FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information with respect to stock
options exercised by the executive officers named in the Summary Compensation
Table during the fiscal year ended March 31, 2000. In addition, the table sets
forth the number of shares covered by stock options as of the fiscal year ended
March 31, 2000, and the value of the "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, 2000.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at March 31, 2000 At March 31, 2000
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Yorgen H. Edholm........... -- -- -- --
Katherine Glassey Edholm... -- -- -- --
Scott Chalmers............. 110,473 175,965 $3,681,932 $4,796,607
John Schroeder............. -- 40,000 -- $ 730,000
Tamara L. MacDuff.......... 17,033 67,967 $ 467,049 $1,349,551
</TABLE>
Notwithstanding anything to the contrary set forth in any of Brio'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
Brio's executive officers during the fiscal year ended March 31, 2000. The
Committee is responsible for establishing and monitoring the general
compensation policies and compensation plans of Brio, 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.
General Compensation Policy
Under the supervision of the Board of Directors, Brio's compensation policy
is designed to attract and retain qualified key executives critical to Brio'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 Brio'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
Brio and (iii) long-term stock-based incentive awards which are designed to
strengthen the mutuality of interests between the executive officers and Brio'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
15
<PAGE>
which compete with Brio 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. Brio's 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 Brio'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
Brio 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 Brio and thereby
closely align his or her interests with those of Brio's stockholders. Factors
considered in making such awards include the individual's position in Brio, his
or her performance and responsibilities and industry practices and norm. Long-
term incentives granted in prior years and existing level of stock ownership
are also taken into consideration.
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 Brio. Accordingly, the option will provide
a return to the executive officer only if he or she remains in Brio'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 Brio's President and Chief Executive Officer
since 1989. His base salary and bonus for fiscal 2000 was $220,000 and
$105,609, respectively. The Compensation Committee determines Mr. Edholm's base
salary and bonus after evaluating a number of factors including Brio's rate and
amount of revenue growth, Brio's ability to hire and retain key employees and
Brio'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 Brio to each of its executive
officers is expected to be below $1 million and the Committee believes that
options granted under Brio's 1998 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 Brio with
respect to the compensation of its executive officers. It is the Committee's
policy to qualify, to the extent reasonable and possible, its executive
officers' compensation for deductibility under applicable tax law. However,
Brio may from time to time pay compensation to its executive officers that may
not be deductible.
16
<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 Brio, an officer or employee of
Brio. No executive officer of Brio serves as a member of the Board of Directors
or compensation committee of any entity that has one or more executive officers
serving on Brio's Board or Compensation Committee.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In March 1999, Brio entered into an agreement with Yorgen Edholm providing
that, in certain cases of involuntary termination, Mr. Edholm will be paid a
sum equal to six months salary, less applicable withholding. This agreement
replaces Brio's prior agreement on the same subject with Mr. Edholm.
Brio has entered into indemnification agreements with its officers and
directors containing provisions which may require Brio, among other things, to
indemnify Brio's 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. Brio also intends to execute such
agreements with its future directors and executive officers.
Brio believes that all of the transactions set forth above were in Brio's
best interests. As a matter of policy, the transactions were, and all future
transactions between Brio 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 Brio than could
be obtained from unaffiliated third parties.
17
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return data
for Brio's stock for the period from April 30, 1998 (the date on which Brio's
stock was first registered under Section 12 of the Securities Exchange Act of
1934, as amended) 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 Brio completed the initial public offering of its Common Stock, in the
Common Stock of Brio and in each of the comparative indices. The graph further
assumes that such amount was initially invested in the Common Stock of Brio at
a per share price of $11.00, the price to which such stock was first offered to
the public by Brio 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.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, THE NASDAQ NATIONAL MARKET
COMPOSITE INDEX AND THE S&P COMPUTER SOFTWARE AND SERVICES INDEX
PERFORMANCE GRAPH APPEARS HERE
S&P COMPUTER
SOFTWARE &
MEASUREMENT PERIOD BRIO SERVICES INDEX NASDAQ
----------------------- ---- -------------- ------
Measurement Pt - 5/1/98 $100 $100 $100
FYE 7/10/98 $95 $118 $104
FYE 7/18/98 $67 $106 $89
FYE 11/27/98 $60 $127 $108
FYE 2/5/99 $148 $154 $127
FYE 4/16/99 $116 $166 $133
FYE 6/25/99 $133 $166 $136
FYE 9/3/99 $105 $181 $152
FYE 11/12/99 $260 $196 $172
FYE 1/21/00 $324 $229 $226
FYE 3/31/00 $284 $242 $244
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Proposals of stockholders intended to be included in Brio's proxy statement
for the 2001 Annual Meeting of Stockholders must be received by the Tamara L.
MacDuff, Chief Financial Officer of Brio Technology, Inc., 4980 Great America
Parkway, Santa Clara, California 95054, no later than March 27, 2001. If the
Company is
18
<PAGE>
not notified of a stockholder proposal within sixty (60) days prior to the one-
year anniversary of this year's Annual Meeting, then the proxies held by
management of Brio provide discretionary authority to vote against such
stockholder proposal, even though such proposal is not discussed in the Proxy
Statement.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires Brio's directors, executive
officers and persons who own more than 10% of Brio's Common Stock
(collectively, "Reporting Persons") to file with the Securities and Exchange
Commission ("SEC") initial reports of ownership and changes in ownership of
Brio's Common Stock. Reporting Persons are required by SEC regulations to
furnish Brio with copies of all Section 16(a) reports they file. To Brio'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, Brio believes that during its fiscal year ended March 31, 2000,
all Reporting Persons complied with all applicable filing requirements.
STOCK OPTION PLAN INFORMATION
The Company maintains four active employee stock plans: the 2000 Employee
Stock Option Plan (the "2000 Plan"), the 1998 Stock Option Plan (the "1998
Plan"), the 1998 Employee Stock Purchase Plan (the "ESPP") and the 1998
Directors' Stock Option Plan (the "Directors' Plan"). Executive officers are
eligible to participate only in the 1998 Plan and the ESPP. The 1998 Plan
allows for the issuance of both incentive stock and nonstatutory stock options,
while only nonstatutory stock options may be issued under the 2000 Plan and the
Directors Plan. The terms of the 2000 Plan and the 1998 Plan allow options to
be granted with an exercise price equal to at least 85% of the fair market
value of the Common Stock on the date of grant, although the Company generally
issues stock options under both plans, and all incentive stock options under
the 1998 Plan, at 100% of fair market value. All options issued under the
Directors' Plan have exercise prices equal to 100% of fair market value on the
date of grant. Options typically have a ten-year term and a four-year vesting
schedule and generally expire 90 days after the optionee terminates his or her
employment with the Company. As of March 31, 2000, 6,000,000, 5,262,087 and
300,000 shares of Common Stock were reserved for issuance, and 6,000,000,
1,553,428 and 235,000 shares were available for grant, under the 2000 Plan, the
1998 Plan and the Directors' Plan, respectively.
In addition, the Company has options outstanding under its 1992 Stock Option
Plan and options outstanding that it assumed in connection with its acquisition
of SQRIBE Technologies Corp. in August 1999, which were originally issued under
SQRIBE stock plans. The Company is no longer issuing options under either the
1992 Stock Option Plan or the SQRIBE plans.
The ESPP allows employees to purchase Brio stock through payroll deductions
at 85% of the lesser of the fair market value of the Common Stock on either the
beginning of a 24-month offering period or on each of four purchase dates that
take place within the offering period. As of March 31, 2000, 452,461 shares had
been issued under the ESPP and 1,339,548 shares remained available for future
issuance.
19
<PAGE>
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
This Proxy Statement incorporates certain documents of Brio 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 Tamara L. MacDuff, Chief Financial Officer of Brio Technology, Inc., 4980
Great America Parkway, Santa Clara, California 95054, (408) 496-7400. In order
to ensure timely delivery of the documents, such requests should be made by
August 10, 2000.
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,
Tamara L. MacDuff
Chief Financial Officer
July 28, 2000
Santa Clara, California
20
<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 24, 2000
The undersigned stockholder of Brio Technology, Inc., a Delaware
corporation, (Brio) hereby acknowledges receipt of the Notice of Annual Meeting
of Stockholders and Proxy Statement, each dated July 27, 2000, and hereby
appoints Tamara L. MacDuff and Danielle M. Wedel, proxies and attorneys-in-
fact, with full power 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 Network Meeting Center Technology
Mart, located at 5201 Great America Parkway, Suite 122, Santa Clara, California
95054 on Thursday, August 24, 2000, at 10:00 a.m., local time., 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
Bernard J. Lacroute
2. PROPOSAL TO APPROVE THE AMENDMENTS TO BRIO'S 1998 STOCK OPTION PLAN TO
INCREASE THE AGGREGATE NUMBER OF SHARES OF COMMON STOCK AUTHORIZED FOR
ISSUANCE UNDER SUCH PLAN BY 4,000,000 SHARES TO 9,862,087 SHARES, TO
AMEND THE PLAN'S EVERGREEN FEATURE SO THAT IT PROVIDES THAT THE LESSER
OF 4% OF BRIO'S OUTSTANDING COMMON STOCK OR 1,000,000 SHARES SHALL
AUTOMATICALLY BECOME AVAILABLE FOR ISSUANCE UNDER THE PLAN ON THE FIRST
DAY OF THE COMPANY'S FISCAL YEARS BEGINNING IN 2001, 2002 AND 2003, AND
TO INCREASE THE ANNUAL LIMIT ON THE MAXIMUM NUMBER OF SHARES OF COMMON
STOCK THAT CAN BE GRANTED UNDER THE PLAN TO ANY EMPLOYEE DURING A FISCAL
YEAR OF THE COMPANY BY 2,200,000 SHARES TO A TOTAL OF 3,200,000 SHARES.
FOR AGAINST ABSTAIN
3. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR ENDING
MARCH 31, 2001:
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, 2001; 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.)
