<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------------
FORM 10-K/A
AMENDMENT NO. 1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
FOR THE FISCAL YEAR ENDED: OCTOBER 31, 1997
----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
FOR THE TRANSITION PERIOD FROM TO
---------------- -----------------
COMMISSION FILE NUMBER: 0-11552
-------
TELEVIDEO, INC.
-------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 94-2383795
------------------------------- -------------------------------
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2345 HARRIS WAY, SAN JOSE, CALIFORNIA 95131
--------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (408) 954-8333
--------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
--------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $0.01 PAR VALUE
-----------------------------
(TITLE OF CLASS)
----------------
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO
SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES X NO
----- -----
1
<PAGE>
THE APPROXIMATE AGGREGATE MARKET VALUE OF REGISTRANT'S COMMON STOCK HELD
BY NON-AFFILIATES ON FEBRUARY 9, 1998 (BASED UPON THE CLOSING SALES PRICE OF
SUCH STOCK AS REPORTED IN THE NASDAQ NATIONAL MARKET AS OF SUCH DATE) WAS
$35,553,102.
AS OF FEBRUARY 9, 1998, 45,507,970 SHARES OF REGISTRANT'S COMMON STOCK
WERE OUTSTANDING.
DOCUMENTS INCORPORATED BY REFERENCE: NONE
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO
ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE
CONTAINED, TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR
INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM
10-K OR ANY AMENDMENT TO THIS FORM 10-K. [ ]
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus and the Company's Annual Report on Form 10-K for the
fiscal year ended October 31, 1997, which is incorporated by reference
herein, include certain statements that may be deemed to be "forward-looking
statements" within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act. All statements, other than statements of
historical facts, included in this Prospectus that address activities, events
or developments that the Company expects, believes or anticipates will or may
occur in the future, including, but not limited to, such matters as future
product development, business development, marketing arrangements, future
revenues from contracts, business strategies, expansion and growth of the
Company's operations and other such matters are forward-looking statements.
These statements are based on certain assumptions and analyses made by the
Company in light of its experience and perception of historical trends,
current conditions, expected future developments and other factors it
believes are appropriate in the circumstances. Such statements are subject to
a number of assumptions, risks and uncertainties, including the risk factors
discussed below, general economic and business conditions, the business
opportunities (or lack thereof) that may be presented to and pursued by the
Company, changes in law or regulations and other factors, many of which are
beyond control of the Company. Prospective investors are cautioned that any
such statements are not guarantees of future performance and that actual
results or developments may differ materially from those projected in the
forward-looking statements.
(Remainder of this page was intentionally left blank)
2
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INTRODUCTORY STATEMENT
References in this Form 10-K to "TeleVideo," the "Registrant" or the
"Company" refer to TeleVideo, Inc. and its subsidiaries unless the context
indicates otherwise. This report contains registered and unregistered
trademarks of other companies.
PART I
ITEM 1. BUSINESS
THE COMPANY
Founded in 1975, TeleVideo is a market leader providing innovative
high-end PC and Mac compatible monitor and terminal display products;
graphics boards, sound boards and multilingual multimedia upgrade kits. The
Company markets its products worldwide through distributors, mass merchants,
retail stores, value-added resellers ("VARs"), systems integrators and
original equipment manufacturers ("OEMs").
TeleVideo operates in one industry segment.
PRODUCTS
COMPUTER MONITORS
Drawing on its heritage, TeleVideo announced in November 1996, two
premier lines of quality PC and Mac compatible color monitors, the SuperView
Pro Series and SuperView Series. These finely crafted monitors allow a
variety of utilization - home, business, the ever-evolving digital world of
Internet, DVD, sophisticated point-oriented desktop publishing, CAD/CAM
applications and more.
The high quality SuperView Pro Series monitors include the SVP350
21-inch monitor (19.9" diagonal viewable area), the SVP300 19-inch monitor
(18.0" diagonal viewable area), the SVP270 17-inch monitor (15.8" diagonal
viewable area) and the SVP260 17-inch monitor (16.0" diagonal viewable area).
These monitors feature high resolutions, advanced On Screen Display (OSD)
and wide range of scanning frequency. The SVP260, SVP270 and SVP350 monitors
feature Mitsubishi's award winning Diamondtron Aperture Grille technology
which delivers flicker-free, sharp, and crystal-clear images for graphic
designers and engineers for rendering intricate images as in CAD/CAM design
work.
The SVP350 features an Aperture Grille pitch of 0.28mm and a maximum
resolution of 1600 x 1200 at an exceptional 85Hz refresh rate. Horizontal
scanning frequencies range from 30 to 107KHz and vertical frequencies of 50 to
160Hz. The SVP270 has an Aperture Grille pitch of 0.25mm and a maximum
resolution of 1600 x 1200 at 75Hz refresh rate for flicker-free display. It's
horizontal scanning frequency range from 30 to 95KHz and vertical frequencies
from 50 to 160Hz. The SVP260 features an Aperture Grille pitch of 0.25mm and a
maximum resolution of 1600 x 1200 at 65Hz refresh rate, rising to a flicker-free
77Hz refresh rate at 1280 x 1024 resolution. Horizontal scanning frequencies
are from 24 to 82KHz and vertical frequencies from 50 to 120Hz.
3
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
NONE.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The Directors and executive officers of the Company as of February 26,
1997, are as follows:
<TABLE>
<CAPTION>
Name Age Title
--------------- ---- -----------------------------------------------
<S> <C> <C>
K. Philip Hwang 61 Chairman of the Board and Chief Executive
Officer
Ken Ho Chong 56 Vice President and Chief Financial Officer
Anthony Thia 31 Vice President of Marketing
Robert E. Larson 59 Director
Stephen S. Kahng 48 Director
</TABLE>
Dr. K. Philip Hwang is the founder of the Company and has been Chairman
of the Board and Chief Executive Officer since October 1976. From August
1990 to April 1991, he served as the Acting Chief Financial Officer. Since
1992, Dr. Hwang has also served as Chairman of AdMOS (Advanced MOS Systems),
an engineering firm specializing in ASIC chip design. ADMOS is a private
corporation in which TeleVideo holds a 20% interest.
Mr. Ken Ho Chong joined TeleVideo in January 1998 as Vice President and
Chief Financial Officer. Mr. Chong has more than 12 years of executive level
experience at companies in a variety of industries. He is immediate past
president of Enviroflex, Inc., an engineering and manufacturing company in
Anaheim, CA. He was vice president and CFO of Binggrae Company Ltd., a food
processing company based in Korea from January 1994 to December 1996 and from
April 1989 to December 1992 he was president of Union Foods of Costa Mesa, CA.
4
<PAGE>
Mr. Anthony Thia joined TeleVideo as VP of Marketing in August 1996.
Prior to coming to TeleVideo, Mr. Thia was the Director of Marketing at ASI
(Asia Source Inc.), a national PC distributor headquartered in California,
from August 1994 to August 1996. From 1990 to 1994, Mr. Thia was the Sales
and Marketing Manager at ASI. Mr. Thia holds a B.S. in Computer Science from
Iowa State University.
Dr. Robert E. Larson joined the Company as a member of the Board of
Directors effective December 1989. Since September 1983, he has served as
General Partner of Woodside Fund, a venture capital fund, and since September
1985, he has been a member of the Board of Directors of Skye Investment
Advisers, a registered investment advisor firm. Since 1973, Dr. Larson has
been a Consulting Professor in the Engineering-Economic Systems Department at
Stanford University.
Mr. Stephen S. Kahng joined the Company as a member of the Board of
Directors effective November 1994. Since November 1993, Mr. Kahng has been
the President and Chief Executive Officer of Power Computing Corporation,
Austin, Texas, which manufactures Power PC-based workstations. From December
1991 to November 1993, he served as the President of Up To Date Technology,
Inc. which is a system design consulting company to the personal computer
industry.
There are no family relationships among any of the Company's officers
and directors.
COMMITTEES OF THE BOARD
The Company's Audit Committee, consisting of Dr. Larson and Mr. Kahng
met five times during fiscal 1997. This Committee reviews the independence
of the Company's independent certified public accountants, recommends the
engagement and discharge of independent accountants and reviews accounting
policies, internal accounting controls and results of audit engagements.
During fiscal 1997, neither the Board of Directors nor the Company's
independent certified public accountants raised any issues with respect to
matters that required formal review.
The Company does not have any executive, compensation, nominating or
other committees.
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's executive officers and directors and
persons who own more than ten percent of a class of the Company's equity
securities registered under the Exchange Act, to file with the Commission
reports of ownership and changes in ownership of Common Stock and other
equity securities of the Company. Executive officers, directors and greater
than ten percent stockholders are required by Commission regulations to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on review of this information, including written representations that
no other reports were required, the Company believes that during the fiscal
year ended October 31, 1997, each of the Company's executive officers,
directors and holders of ten percent or more of the Company's Common Stock
timely filed all reports required to be filed pursuant to Section 16(a) of
the Exchange Act except that Kristine Kim, a Director and Executive during
fiscal 1997, inadvertently failed to file her Form 3 and Form 4s for
September 1997 and October 1997. She had no holding to report on Form 3. Her
September 1997 Form 4, if filed, would have reflected two option exercises on
a single day and seven sales of the shares she acquired, all on the same day.
Her October 1997 Form 4, if filed, would have reflected one option exercise
and two subsequent sales on a single day of such shares. All of these
transactions were reported on a Form 5.
5
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The following table shows executive compensation paid or accrued by the
Company for services rendered to the Company or its subsidiaries in all
capacities during the three fiscal years ended October 31, 1997, to the
Company's Chief Executive Officer and each of the Company's other Executive
Officers (the "Named Executive Officers") whose total annual salary and bonus
exceeded $100,000 in the fiscal year ended October 31, 1997.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------- ----------------------
OTHER ANNUAL OPTIONS/ OTHER
COMPENSATION RESTRICTED SARS LTIP COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY($) ($) STOCK (SHARES) PAYOUTS SATION
--------------------------- ---- --------- ------------ ---------- -------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
K. Philip Hwang 1997 140,000 0 0 0 0 0
Chief Executive Officer 1996 140,000 0 0 0 0 0
1995 140,000 0 0 0 0 0
Kristine Kim 1997 128,000 0 0 0 0 0
Vice President of Sales 1996 124,000 0 0 0 0 0
1995 71,000 0 0 0 0 0
</TABLE>
The Company has no employment agreements with any of its Executive
Officers.
OTHER COMPENSATION
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information with respect to options granted
in the Last Fiscal Year to the Named Executive Officers.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------
% OF TOTAL POTENTIAL REALIZABLE VALUE
NUMBER OF OPTIONS AT ASSUMED ANNUAL RATES OF
SECURITIES GRANTED TO STOCK PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OPTION TERM
OPTIONS IN FISCAL PRICE EXPIRATION -------------------------------
NAME GRANTED YEAR ($/SH) DATE 5% ($) 10% ($)
---- ----------- --------- -------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
K. Philip Hwang - - - - - -
Kristine Kim - - - - - -
</TABLE>
6
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following table provides information with respect to option
exercises in the Last Fiscal Year by the Named Executive Officers and the
value of their unexercised options at Fiscal Year End.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING
UNEXERCISED OPTIONS VALUE OF UNEXERCISED
SHARES AT FISCAL YEAR IN-THE-MONEY OPTIONS AT
ACQUIRED VALUE END (#) (2) FISCAL YEAR END ($) (2) (3)
ON REALIZED ----------- --------------------------
NAME EXERCISE (#) ($) (1) VESTED UNVESTED VESTED UNVESTED
---- ------------ -------- ------ -------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
K. Philip Hwang - - - - - -
Kristine Kim 70,000 .88 50,000 75,000 26,000 33,000
20,000 .91 - - - -
</TABLE>
(1) Market value of the shares on date of exercise, less the exercise price.
(2) All options are immediately exercisable, but shares issued upon exercise
are subject to vesting restrictions. Accordingly, there were no
unexercisable options outstanding at fiscal year end.
(3) Value is based on fair market value of the Company's common stock of
$0.84375 per share on October 31, 1997 (the last trading day of the last
fiscal year), less the exercise price.
LONG TERM INCENTIVE PLAN AWARDS: No long term incentive awards were made
by the Company during fiscal 1997. Accordingly, a table setting forth such
awards has not been included.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company are not separately
compensated for their services as directors or as members of committees of
the Board of Directors. During fiscal 1997, directors who were not employees
of the Company received $500 for each board meeting attended and were
reimbursed for reasonable travel and other expenses. No compensation is paid
for attendance at meetings of committees of the Board of Directors.
EMPLOYEE BENEFIT PLANS
TELEVIDEO, INC. 1991 INCENTIVE STOCK OPTION PLAN
On November 12, 1991, the Board adopted the TeleVideo, Inc. 1991
Incentive Stock Option Plan (the "1991 ISO Plan"), which was approved by the
stockholders of the Company at the 1992 Annual Meeting. This plan authorizes
4,000,000 shares of Common Stock for options to be granted to employees of
the Company including officers. Options granted under the 1991 ISO Plan are
intended to qualify as incentive stock options within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code). Options are
approved by the Board, which acts as the Plan Administrator. All options are
granted at an exercise price at least equal to 100% of the fair market value
on the date of grant (110% for persons who own at least 10% of the Company's
outstanding Common Stock).
CASH PROFIT SHARING PLAN
Effective May 1984, the Board approved a Cash Profit Sharing Plan for
employees (other than Executive Officers, Directors, and sales persons
covered by the sales incentive plan) that provides for semi-annual cash
payments to eligible employees who complete six months of service with the
Company. The cash payment is determined by a formula based upon the
Company's contribution of a percentage of the after-tax profits of the
Company and the ratio that each eligible employee's compensation bears to the
eligible compensation of all employees in the plan. For fiscal year 1997, no
amount was paid under this plan.
7
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock as of February 26, 1998: (i) all
those known to the Company to be beneficial owners of more than five percent
(5%) of its Common Stock; (ii) each Director and Director nominee of the
Company; (iii) each person named in the Summary Compensation Table; and (iv)
all Executive Officers and Directors of the Company as a group. The Company
knows of no arrangements that will result in a change in control subsequent
to the date hereof. Except as otherwise indicated, each person has sole
investment and voting power with respect to the shares shown, subject to
community property laws, where applicable.
<TABLE>
<CAPTION>
DIRECTORS, OFFICERS AND PRINCIPAL STOCKHOLDERS BENEFICIAL OWNERSHIP
---------------------------------------------- ----------------------
PERCENT
NAME SHARES OF TOTAL
---- ------ --------
<S> <C> <C>
K. Philip Hwang 28,214,092(1) 61.97%
2345 Harris Way, San Jose, CA 95131
Stephen Kahng 50,000(3) (2)
2555 North IH-35, Round Rock, TX 78664
Kristine Kim 100,000(4) (2)
2345 Harris Way, San Jose, CA 95131
Robert E. Larson 100,000(5) (2)
850 Woodside Drive, Woodside, CA 94062
All present Executive Officers and Directors as a
Group (8 persons) 28,804,092(6) 63.3%
</TABLE>
- ------------
(1) Includes an aggregate of 303,934 shares held in trust for Dr. Hwang's
children, 90,000 shares held of record by the Kyupin Philip and C. Gemma
Hwang Foundation, and the 27,820,158 shares held of record by Dr. Hwang and
his spouse.
(2) Represents less than one percent (1%).
(3) Includes 50,000 shares Mr. Kahng may acquire within 60 days of the date
of this table pursuant to the exercise of stock options.
(4) Includes 100,000 shares Ms. Kim may acquire within 60 days of the
date of this table pursuant to the exercise of stock options.
(5) Includes 150,000 shares Dr. Larson may acquire within 60 days of the
date of this table pursuant to the exercise of stock options.
(6) Includes (i) 175,000 shares of Common Stock certain officers (not named
in the table) may acquire within 60 days of the date of this table
pursuant to the exercise of stock options, and (ii) the shares of
Common Stock referred to in notes 1 to 5.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the two fiscal years ended October 31, 1997, there were no
Company transactions exceeding $60,000 in which any Director or Executive
Officer, Director nominee, principal stockholder or member of any such
person's immediate family had a direct or indirect material interest.
Similarly, there are no such proposed transactions pending.
8
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
TELEVIDEO, INC.
-------------------------------
(REGISTRANT)
DATE: FEBRUARY 27, 1998 BY: /s/ KEN HO CHONG
-------------------------------
KEN HO CHONG
VICE PRESIDENT & CFO
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities on the dates indicated.
SIGNATURE TITLE DATE
------------------------ --------------------- --------------------
/s/ K. PHILIP HWANG CHAIRMAN OF THE BOARD FEBRUARY 27, 1998
- ---------------------- AND CHIEF EXECUTIVE
K. Philip Hwang OFFICER (Principal
Executive Officer)
/s/ KEN HO CHONG VICE PRESIDENT AND CHIEF FEBRUARY 27, 1998
- ---------------------- FINANCIAL OFFICER (Principal
Ken Ho Chong Financial and Accounting
Officer)
/s/ ROBERT E. LARSON DIRECTOR FEBRUARY 27, 1998
- ----------------------
Robert E. Larson
/s/ STEPHEN S. KAHNG DIRECTOR FEBRUARY 27, 1998
- ----------------------
Stephen S. Kahng
9
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EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
We have issued our report dated February 3, 1998, accompanying the consolidated
financial statements included in the Annual Report of TeleVideo, Inc. and
Subsidiaries on Form 10-K for the year ended October 31, 1997. We hereby
consent to the incorporation by reference of said report in the Registration
Statement of TeleVideo, Inc. on Form S-8 (File No. 33-26203, effective November
2, 1992).
/s/ GRANT THORNTON LLP
- ------------------------
Grant Thornton LLP
San Jose, California
February 27, 1998
