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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(AMENDMENT NO. 1)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1999
Commission File Number 0-19579
INTERACTIVE NETWORK, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-3025019
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation and organization)
1161 OLD COUNTY ROAD, BELMONT CALIFORNIA 94002
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(Address of principal executive offices, including zip code)
(650) 947-3345
(Registrant's telephone number)
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, NO PAR VALUE PER SHARE
(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 __
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. [ ]
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequently to the distribution of securities under a plan
confirmed by a Court. Yes X No __
The aggregate market value of the voting stock held by non-affiliates
(non- officers, directors and 10% shareholders and excluding the shares held by
the Voting Trust (see Item 12)) of the Registrant, based on the closing price of
the common stock on May 19, 2000, as reported on the OTC Bulletin Board for the
last trading day prior to that date, was approximately $39.7 million. Shares of
common stock held by each executive officer and director and holder of 10% or
more of the outstanding common stock have been excluded from this computation in
that such persons may be deemed to be affiliates. This determination of
affiliate status is not necessarily a conclusive determination for other
purposes.
As of May 19, 2000 the Registrant had outstanding 39,427,605 shares of
Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE
None
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EXPLANATORY NOTE
This Amendment No. 1 on Form 10-K/A to the Annual Report on Form 10-K
for the year ended December 31, 1999 is being filed to amend Item 12, Item 13
and Item 14 to read as follows. No other changes are being made to the Form
10-K.
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PART III
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information known to us with
respect to the beneficial ownership of our common stock as of May 19, 2000, by
(i) each shareholder known to us to own beneficially more than 5% of our common
stock; (ii) each of our directors; (iii) the named executive officer in the
summary compensation table; and (iv) all of our directors and executive officers
as a group.
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APPROXIMATE
SHARES PERCENT
BENEFICIALLY BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED(1) OWNED(1)
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AT&T Corp. (2) ................................................. 7,773,815 19.70%
32 Avenue of the Americas
New York, NY 10013-2412
National Broadcasting Company Holding, Inc. (2) ................ 3,645,575 9.20%
30 Rockefeller Plaza
New York, NY 10112
Gannett Co., Inc. (3)........................................... 2,196,666 5.50%
1000 Wilson Boulevard
Arlington, VA 22209
Voting Agreement (4) ........................................... 7,814,589 19.80%
David B. Lockton (5) ........................................... 2,250,000 5.70%
Bruce W. Bauer (6) ............................................. 2,150,500 5.40%
John J. Bohrer (7) ............................................. 222,850 *
William H. Green (8)............................................ 75,000 *
William L. Groeneveld (9)....................................... 62,500 *
Robert Brown (10)............................................... 137,375 *
All executive officers and directors as a group (5 persons) (11) 2,648,225 6.70%
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* Less than 1% of outstanding shares.
(1) The percentage calculation is based on an aggregate of 39,427,605 shares
outstanding as of May 19, 2000. Except as indicated and pursuant to
applicable community property laws, we believe that all persons named in
the table have sole voting and investment power with respect to all
shares of Common Stock beneficially owned by them.
(2) Includes for each entity only those shares listed herein for such entity:
(i) 2,942,907 shares held by Tele-Communications, Inc., a wholly-owned
subsidiary of AT&T Corp and (ii) 1,902,279 shares held by National
Broadcasting Company Holding, Inc., a wholly-owned subsidiary of General
Electric Company which are subject to the Voting Agreement (see footnote
4 below).
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(3) Pursuant to a Stock Purchase Agreement dated December 2, 1992, Gannett
Co., Inc. ("Gannett"), so long as it owns at least 500,000 shares of the
Company's Common Stock, has the right to cause the Company to include one
person designated by Gannett in the slate of nominees recommended for
election as director. The Company is required to use its best efforts to
cause such designee to be elected as a director, and David B. Lockton has
agreed to vote his shares to cause such designee of Gannett to be elected
to the Board of Directors. Gannett has advised the Company that it will
not exercise any rights it has under the 1992 Agreement to designate a
person to be elected to the Company's Board of Directors this year.
(4) Pursuant to a certain voting agreement, each of the parties to a certain
settlement agreement agreed to vote their shares issued in such agreement
as directed by a committee (except for matters relating to David Lockton
and certain major transactions of our company), which currently consists
of John Bohrer, William H. Greene and Bruce Bauer. This agreement does
not provide for any other joint action by the parties thereto. The
parties to the voting agreement disclaim beneficial ownership of shares
owned by other parties thereto, and the committee disclaims beneficial
ownership of all of the shares subject to the voting agreement.
(5) As of May 19, 2000, David Lockton claimed ownership of options to
purchase 2,250,000 shares. He claimed that one option granted in October
of 1994 gave him the right to purchase 450,000 shares acquirable upon
exercise of stock options that were then currently exercisable and a
second option granted as of November 3, 1995 gave him the right to
purchase 1,800,000 shares acquirable upon exercise of stock options that
were then currently exercisable. We disputed the ownership and validity
of these options. Trial on these matters took place May 8-11 and May
30-31, 2000 in U.S. Bankruptcy Court. A Memorandum Decision filed by the
Bankruptcy Court on September 27, 2000 found that Lockton had the right
to exercise options to purchase 900,000 shares. This right is forfeited
if Lockton does not exercise it within thirty days of the filing of the
judgment. The judgment has been filed and neither Lockton nor the Company
have decided whether to appeal the judgment. We have no knowledge
regarding Lockton's ownership of any other shares.
(6) Includes (i) 100,500 shares of Common Stock and (ii) 2,050,000 shares
that may be acquired upon exercise of stock options that are currently
exercisable.
(7) Includes 150,000 shares of Common Stock that may be acquired upon
exercise of stock options that are currently exercisable.
(8) Includes 75,000 shares of Common Stock that may be acquired upon exercise
of stock options that are currently exercisable.
(9) Includes 62,500 shares of Common Stock that may be acquired upon exercise
of stock options that are exercisable.
(10) Includes 100,000 shares of Common Stock that may be acquired upon
exercise of stock options that are currently exercisable within 60 days
of March 1, 2000.
(11) Includes 2,337,500 shares of Common Stock that may be acquired upon
exercise of stock options that are exercisable within 60 days of March 1,
2000.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
GANNETT AGREEMENTS
We entered into a stock purchase agreement with Gannett and David B.
Lockton, dated December 2, 1992, as amended (the "Gannett Agreement"). Under the
Gannett Agreement, we sold 1,000,000 shares of common stock to Gannett at a
price of $5.00 per share. The shares sold to Gannett were subject to adjustment
for certain dilutive issuances of securities by us and an aggregate of 1,196,666
shares of common stock have been issued to Gannett pursuant to such
anti-dilution provisions; those provisions have since expired. Under the Gannett
Agreement, Gannett has the right to cause us to include in the slate of nominees
recommended by our board of directors or management to shareholders for election
as directors at each annual meeting of shareholders one person designated by
Gannett. We are required to use our best efforts to cause any common stock for
which our management or directors hold proxies, or are otherwise entitled to
vote, to be voted in favor of the election of such designee. In addition, Mr.
Lockton is required to vote all shares of common stock owned by him in favor of
such designee. Gannett has advised us that it does not choose to exercise its
right to designate a director at this time. Under the Gannett Agreement, we have
also agreed, among other things, to coordinate with Gannett in developing and
marketing certain electronic news services and to provide Gannett with a right
of first refusal to participate exclusively in a partnership or joint venture
with us in doing so. While we have assumed our obligations under the Gannett
Agreement, we have no present plans that would involve the types of business
activities contemplated by that agreement.
The Gannett Agreement also provided Gannett with certain rights with
respect to the registration of its shares of our common stock under the
Securities Act of 1933, as amended (the "Securities Act"). Under the agreement,
if we propose to register any of the securities under the Securities Act, either
for our own account or for the account of other security holders exercising
registration rights, Gannett is entitled to notice of such registration and is
entitled to include shares of such common stock therein. These rights are
subject to certain conditions and limitations, among them the right of the
underwriters of a registered underwritten offering to limit the number of shares
included in that registration. In addition, Gannett has the right to demand that
we file a registration statement under the Securities Act at our expense with
respect to its shares of common stock, and we are required to use our best
efforts to effect such registration, subject to certain conditions and
limitations, including our right not to effect a requested registration within
three months following an offering of its securities. Gannett may also require
us to file registration statements on Form S-3 when such registration form is
available to us. We are generally obligated to pay all expenses incurred in
connection with such registrations, except for underwriting discounts, selling
commissions and stock transfer taxes.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents have been filed as a part of this
Annual Report on Form 10-K.
(1) Financial Statements:
Reference is made to the Index to Financial Statements under
Item 8 in Part II of this Form 10-K.
(2) Financial Statement Schedules:
All schedules have been omitted since they are not required or
are not applicable or the required information is shown in the
financial statements and related notes.
(3) Exhibits:
The exhibits listed below are required by Item 601 of
Regulation S-K. Each management contract or compensatory plan or arrangement
required to be filed as an exhibit to this Form 10-K has been identified.
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
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3.1 Amended and Restated Articles of Incorporation of the
Registrant (incorporated by reference to Exhibit 4.1 of
Exhibits to Registrant's Form S-8 Registration Statement, as
filed with the Commission on November 10, 1992)
3.2 Certificate of Determination of the Registrant, filed with the
California Secretary of State on September 20, 1994
(incorporated by reference to Exhibit 3.3 of Exhibits to
Registrant's Form 8-K Report, as filed with the Commission on
October 3, 1994)
3.3 Certificate of Amendment of Amended and Restated Articles of
Incorporation of Registrant, dated May 22, 1995 (incorporated
by reference to Exhibit 3.3 of Exhibits to Registrant's Form
10-K Annual Report, as filed with the Commission on March 30,
1999)
3.4(a) Bylaws of the Registrant, as amended (incorporated by reference
to Exhibit 4.2 of Exhibits to Registrant's Form S-1
Registration Statement, as filed with the Commission on
November 10, 1992)
3.4(b) Amendment to Bylaws of the Registrant, dated February 26, 1999
(incorporated by reference to Exhibit 3.4(b) of Exhibits to
Registrant's Form 10-K Annual Report, as filed with the
Commission on March 30, 1999)
4.1 Specimen Common Stock Certificate of the Registrant
(incorporated by reference to Exhibit 4.1 of Exhibits to
Registrant's Form S-1 Registration Statement (No. 33-58780),
filed with the Commission on February 25, 1993)
9.1 Voting Trust Agreement, included in Settlement Agreement
attached as an Exhibit to the Plan of Reorganization, filed by
Registrant in the United States Bankruptcy Court for the
Northern District of California (incorporated by reference to
Exhibit 1.1 of Exhibits to Registrant's Form 8-K, as filed with
the Commission on April 29, 1999)
*10.1 Sale of Patent Agreement, between the Registrant and David B.
Lockton, dated November 18, 1986, and amendments thereto, dated
December 21, 1987 and July 30, 1990
*10.5 Settlement Agreement and Covenant Not to Sue, between the
Registrant and NTN Communications, Inc., dated April 1987, and
attached Patent License Agreement (Exhibit 10.17 of
Registration Statement)
*10.6(a) Employment Agreement, between the Registrant and David B.
Lockton, dated January 1, 1991 (incorporated herein by
reference to Exhibit 10.22 of Registration Statement)
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10.6(b) Rider to Employment Agreement, between the Registrant and David
B. Lockton, dated December 10, 1994 (incorporated by reference
to Exhibit 10.54 to the Annual Report of the Registrant on Form
10-K for the year ended December 31, 1994)
10.7 Deferred Compensation and Non-Competition Agreement, between
the Registrant and David B. Lockton, dated December 10, 1994
(incorporated by reference to Exhibit 10.53 of Exhibit B to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1994)
10.8 1999 Stock Option Plan (incorporated by reference to Exhibit A
to the Proxy Statement for the Special Meeting of Shareholders
of Registrant held on March 31, 1999 -- filed with the
Commission on March 15, 1999)
10.9 Form of Stock Option Agreement for use with the 1999 Stock
Option Plan (incorporated by reference to Exhibit 10.9 of
Exhibits to Registrant's Form 10-K Annual Report, as filed with
the Commission on March 30, 1999)
*10.10 Form of Indemnification Agreement (Exhibit 10.31 of Form S-1
Registration Statement)
10.11 Termination and License Agreement, dated January 31, 2000,
between the Registrant and Two Way TV Limited, a corporation
organized under the laws of England and Wales (incorporated by
reference to Exhibit 2.5 of Form 8-K, as filed with the
Commission dated February 11, 2000).
10.12 Joint Venture and Stock Purchase Agreement, dated December 6,
1999, between the Registrant and Two Way TV Ltd., a corporation
organized under the laws of England and Wales (incorporated by
reference to Exhibit 2.1 of Form 8-K, as filed with the
Commission dated February 11, 2000).
10.13 Joint Venture License Agreement, dated January 31, 2000,
between the Registrant, Two Way TV Limited, a corporation
organized under the laws of England and Wales, and TWIN
Entertainment Inc., a Delaware corporation (incorporated by
reference to Exhibit 2.2 of Form 8-K, as filed with the
Commission dated February 11, 2000).
10.14(a) Stock Purchase Agreement, dated December 2, 1992, among the
Registrant, Gannett Co., Inc. and David B. Lockton
(incorporated by reference to Exhibit 28.4 of Exhibits to
Registrant's Form 8-K Report, as filed with the Commission on
December 17, 1992)
10.14(b) Waiver and Amendment of Stock Purchase Agreement, with Gannett
Co., Inc., dated September 22, 1994 (incorporated by reference
to Exhibit 10.12(b) of Exhibits to Registrant's Form 10-K
Annual Report, as filed with the Commission on March 30, 1999)
<PAGE>
10.15 Employment Agreement between the Registrant and Bruce Bauer,
dated April 13, 2000 (incorporated by reference to Exhibit
10.13 of Exhibits to Registrant's Form 10-K Annual Report,
filed with the Commission on April 14, 2000)
10.16 Employment Agreement between the Registrant and Dr. Robert
Brown, dated April 13, 2000 (incorporated by reference to
Exhibit 10.14 of Exhibits to Registrant's Form 10-K Annual
Report, filed with the Commission on April 14, 2000)
10.17 Addendum to Consulting Agreement for Gregg Freishtat
(incorporated by reference to Exhibit 10.15 of Exhibits to
Registrant's Form 10-K Annual Report, filed with the Commission
on April 14, 2000)
10.18 Addendum to Consulting Agreement for Eduard Mayer (incorporated
by reference to Exhibit 10.16 of Exhibits to Registrant's Form
10-K Annual Report, filed with the Commission on April 14,
2000)
23.1 Consent of KPMG LLP
25.1 Power of Attorney. Reference is made to the signature page of
this Report.
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* Incorporated by reference to the Exhibits of corresponding number
(unless otherwise noted) to Registrant's Form S-1 Registration
Statement (No. 33-42951) filed with the Commission on September
24, 1991, as amended.
(b) Reports on Form 8-K.
* Form 8-K Report, filed with the Securities and Exchange Commission (the
"SEC") on April 15, 1999.
* Form 8-K Report, filed with the SEC on April 29, 1999.
* Form 8-K Report, filed with the SEC on May 26, 1999.
* Form 8-K Report, filed with the SEC on February 11, 2000.
* Form 8-K Report, filed with the SEC on March 10, 2000.
<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.
INTERACTIVE NETWORK, INC.
By: /s/ Bruce W. Bauer
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Bruce W. Bauer
Chairman of the Board, Chief Executive
Officer and President
(Principal Executive Officer)
Date: November 9, 2000
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 and on the dates indicated.
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SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Bruce Bauer Chairman of the Board, Chief Executive Officer November 9, 2000
------------------------ and President (Principal Executive Officer &
Bruce W. Bauer Prinicipal Financial Officer)
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