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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 permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
BROADVISION, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box)
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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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):
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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
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[ ] 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.
6. Amount Previously Paid:
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7. Form, Schedule or Registration Statement No.:
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8. Filing Party:
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9. Date Filed:
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BROADVISION, INC.
585 BROADWAY
REDWOOD CITY, CA 94063
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 29, 1999
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TO THE STOCKHOLDERS OF BROADVISION, INC.:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of
BROADVISION, INC., a Delaware corporation (the "Company"), will be held on
Wednesday, September 29, 1999 at 2:00 p.m. local time at the Company's offices
at 585 Broadway, Redwood City, California 94063 for the following purposes:
1. To approve an amendment to the Company's Amended and Restated
Certificate of Incorporation to increase the authorized number of shares
of Common Stock to 500,000,000 shares and Preferred Stock to 10,000,000
shares.
2. To approve the Company's Equity Incentive Plan, as amended, to increase
the aggregate number of shares of Common Stock authorized for issuance
under such plan by 1,000,000 shares and to allow the Company to grant
stock options and certain other stock awards to non-employee directors.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on September 10,
1999 as the record date for the determination of stockholders entitled to notice
of and to vote at this Special Meeting and at any adjournment or postponement
thereof.
By Order of the Board of Directors
/s/ Pehong Chen
Pehong Chen
Chairman of the Board,
President and Chief Executive Officer
Redwood City, California
September 16, 1999
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE PREPAID IF
MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. PLEASE
NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD
HOLDER A PROXY ISSUED IN YOUR NAME.
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BROADVISION, INC.
585 BROADWAY,
REDWOOD CITY, CA 94063
PROXY STATEMENT FOR SPECIAL MEETING OF STOCKHOLDERS
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
BroadVision, Inc., a Delaware corporation (the "Company"), for use at the
Special Meeting of Stockholders to be held on September 29, 1999, at 2:00 p.m.
local time (the "Special Meeting"), or at any adjournment or postponement
thereof, for the purposes set forth herein and in the accompanying Notice of
Special Meeting. The Special Meeting will be held at the Company's offices at
585 Broadway, Redwood City, California 94063. The Company intends to mail this
proxy statement and accompanying proxy card on or about September 16, 1999, to
all stockholders entitled to vote at the Special Meeting.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies, including
preparation, assembly, printing and mailing of this proxy statement, the proxy
and any additional information furnished to stockholders. Copies of solicitation
materials will be furnished to banks, brokerage houses, fiduciaries and
custodians holding in their names shares of Common Stock beneficially owned by
others to forward to such beneficial owners. The Company may reimburse persons
representing beneficial owners of Common Stock for their costs of forwarding
solicitation materials to such beneficial owners. Original solicitation of
proxies by mail may be supplemented by telephone, telegram or personal
solicitation by directors, officers or other regular employees of the Company.
No additional compensation will be paid to directors, officers or other regular
employees for such services.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of Common Stock at the close of business on
September 10, 1999 will be entitled to notice of and to vote at the Special
Meeting. At the close of business on September 10, 1999 the Company had
outstanding and entitled to vote 25,774,023 shares of Common Stock.
Each holder of record of Common Stock on such date will be entitled to one
vote for each share held on all matters to be voted upon at the Special Meeting.
All votes will be tabulated by the inspector of election appointed for the
meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted towards the
tabulation of votes cast on proposals presented to the stockholders and will
have the same effect as negative votes. Broker non-votes are counted towards a
quorum, but are not counted for any purpose in determining whether a matter has
been approved.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing with the
Secretary of the Company at the Company's principal executive office, 585
Broadway, Redwood City, California 94063, a written notice of revocation or a
duly executed proxy bearing a later date, or it may be revoked by attending the
meeting and voting in person. Attendance at the meeting will not, by itself,
revoke a proxy.
STOCKHOLDER PROPOSALS
Proposals of stockholders that are intended to be presented at the
Company's 2000 Annual Meeting of Stockholders must be received by the Company
not later than December 10, 1999 in order to be included in the proxy statement
and proxy relating to that Annual Meeting. The deadline for submitting a
stockholder proposal or a nomination for director that is not included in such
proxy statement and proxy is not later than
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the close of business on the 60th day nor earlier than the close of business on
the 90th day prior to the first anniversary of the Company's 1999 Annual Meeting
of Stockholders or May 12, 2000. Stockholders are also advised to review the
Company's Bylaws, which contain additional requirements with respect to advance
notice of stockholder proposals and director nominations.
PROPOSAL 1
APPROVAL OF INCREASE IN NUMBER OF AUTHORIZED SHARES
OF COMMON STOCK AND PREFERRED STOCK
The Board has adopted, subject to stockholder approval, an amendment to the
Company's Amended and Restated Certificate of Incorporation to increase the
Company's authorized number of shares of Common Stock from 50,000,000 to
500,000,000 and Preferred Stock from 5,000,000 to 10,000,000.
The additional Common Stock to be authorized by adoption of the amendment
would have rights identical to the currently outstanding Common Stock of the
Company. Adoption of the proposed amendment and issuance of the Common Stock
would not affect the rights of the holders of currently outstanding Common Stock
of the Company, except for effects incidental to increasing the number of shares
of the Company's Common Stock outstanding, such as dilution of the earnings per
share and voting rights of current holders of Common Stock. If the amendment is
adopted, it will become effective upon filing of a Certificate of Amendment of
the Company's Amended and Restated Certificate of Incorporation with the
Secretary of State of the State of Delaware.
In addition to the 25,561,291 shares of Common Stock outstanding at July
31, 1999, the Board has reserved 5,184,643 shares for issuance upon exercise of
options and rights granted under the Company's stock option and stock purchase
plans, and up to approximately 60,000 shares of Common Stock that may be issued
upon exercise of warrants outstanding.
There are no outstanding shares of Preferred Stock. The Board is currently
authorized, without the vote of the stockholders, to provide for the issuance of
up to 5,000,000 shares of Preferred Stock in one or more series and, with
respect to each series, to establish the number of shares, to fix the rights,
preferences and privileges of the shares within each series, to determine the
limitations on the shares within each series and to increase or generally
decrease the number of shares of each series.
The Board desires to have such shares available to provide additional
flexibility to use its capital stock for business and financial purposes in the
future. The additional shares may be used without further stockholder approval
for various purposes including, without limitation, raising additional capital,
providing equity incentives to employees, officers or directors, establishing
strategic relationships with other companies and expanding the Company's
business or product lines through the acquisition of other businesses or
products.
The Board is considering using the additional shares to declare a stock
dividend to be issued on all outstanding shares of the Company's Common Stock.
The objective of the stock dividend would be to proportionately lower the market
price of the Company's Common Stock. Such lower price would be expected to
increase the liquidity and broaden the marketability of the Company's Common
Stock. In addition, a stock dividend would enable the Company to provide its
employees and consultants with more attractive equity-based incentive packages
and therefore would allow the Company to more easily attract and retain
qualified employees and consultants. The Board has not made a final
determination as to effecting a stock dividend and may decide, in the best
interests of the Company and due to market conditions or otherwise, not to
effect such a dividend. Therefore, no assurances can be given that the Board
will determine to effect any stock dividend even if this Proposal 1 is adopted.
The additional shares of Common Stock and Preferred Stock that would become
available for issuance if the proposal were adopted could be used by the Company
to oppose a hostile takeover attempt or delay or prevent changes in the control
or management of the Company. For example, without further stockholder approval,
the Board could adopt a "poison pill" that would, under certain circumstances
related to an acquisition of shares not approved by the Board of Directors, give
certain holders the right to acquire
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additional shares of Common Stock at a low price, or the Board could
strategically sell shares of Common Stock or Preferred Stock in a private
transaction to purchasers who would oppose a takeover or favor the current
Board. Although this proposal to increase the authorized Common Stock and
Preferred Stock has been promoted by business and financial considerations and
not by the threat of any hostile takeover attempt (nor is the Board currently
aware of any such attempts directed at the Company), nevertheless, stockholders
should be aware that approval of this proposal could facilitate future efforts
by the Company to deter or prevent changes in control of the Company, including
transactions in which the stockholders might otherwise receive a premium for
their shares over then current market prices.
The affirmative vote of the holders of a majority of the shares of Common
Stock will be required to approve this amendment to the Company's Amended and
Restated Certificate of Incorporation. As a result, abstentions and broker
non-votes will have the same effect as negative votes.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 1
PROPOSAL 2
APPROVAL OF EQUITY INCENTIVE PLAN, AS AMENDED
In April 1996, the Board of Directors adopted, and the stockholders
subsequently approved, the Incentive Plan. Originally, there were 5,000,000
shares of the Company's Common Stock authorized for issuance under the Incentive
Plan. In March 1998, the Board approved, and the stockholders subsequently
approved, an amendment to the Incentive Plan to increase the number of shares
authorized for issuance under the Incentive Plan from a total of 5,000,000
shares to 5,975,000 shares of Common Stock. In February 1999, the Board
approved, and the stockholders subsequently approved, an amendment to the
Incentive Plan to increase the number of shares authorized for issuance under
the Incentive Plan from a total of 5,975,000 shares to 6,875,000.
At July 31, 1999, options (net of canceled or expired options) covering an
aggregate of 6,838,082 shares of the Company's Common Stock had been granted
under the Incentive Plan, and 36,918 shares (plus any shares that might in the
future be returned to the Incentive Plan as a result of cancellations or
expiration of options) remained available for future grant under the Incentive
Plan. During the last fiscal year, under the Incentive Plan, the Company granted
to all current executive officers as a group options to purchase 158,000 shares
at exercise prices of $6.50 to $16.938 per share and to all employees (excluding
executive officers) as a group options to purchase 1,430,050 shares at exercise
prices of $6.25 to $27.813 per share.
In August 1999, the Board approved an amendment to the Incentive Plan,
subject to stockholder approval, to enhance the flexibility of the Board, the
Compensation Committee and the Non-Officer Stock Option Committee in granting
stock awards to the Company's employees, directors and consultants. The
amendment increases the number of shares authorized for issuance under the
Incentive Plan from a total of 6,875,000 shares to 7,875,000 shares of Common
Stock. The Amendment also provides that the Company may grant nonstatutory stock
options, stock bonuses and restricted stock purchase awards to non-employee
directors under the Incentive Plan. The Board adopted this amendment to ensure
that the Company can continue to grant stock awards to employees,
employee-directors and consultants, and to allow the Company to grant stock
awards to non-employee directors, at levels determined appropriate by the Board,
the Compensation Committee and the Non-Officer Stock Option Committee.
Stockholders are requested in this Proposal 2 to approve the Incentive
Plan, as amended. The affirmative vote of the holders of a majority of the
shares present in person or represented by proxy and entitled to vote at the
meeting will be required to approve the Incentive Plan, as amended. Abstentions
will be counted toward the tabulation of votes cast on proposals presented to
the stockholders and will have the same effect as negative votes. Broker
non-votes are counted towards a quorum, but are not counted for any purpose in
determining whether this matter has been approved.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 2
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The essential features of the Incentive Plan are outlined below:
GENERAL
The Incentive Plan provides for the grant of both incentive and
nonstatutory stock options, stock bonuses and restricted stock purchase awards
(collectively, "awards"). Incentive stock options granted under the Incentive
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").
Nonstatutory stock options granted under the Incentive Plan are intended not to
qualify as incentive stock options under the Code. See "Federal Income Tax
Information" for a discussion of the tax treatment of incentive and nonstatutory
stock options. To date, the Company has granted only stock options under the
Incentive Plan.
PURPOSE
The Incentive Plan was adopted to provide a means by which selected
employees, directors of and consultants to the Company and its affiliates could
be given an opportunity to purchase stock in the Company, to assist in retaining
the services of employees holding key positions, to secure and retain the
services of persons capable of filling such positions and to provide incentives
for such persons to exert maximum efforts for the success of the Company. At
July 31, 1999, all of the Company's approximately 376 employees and consultants
were eligible to participate in the Incentive Plan. With stockholder approval of
the amendment to the Incentive Plan, all of the Company's directors will be
eligible to participate in the Incentive Plan.
ADMINISTRATION
The Incentive Plan is administered by the Board of Directors of the
Company. The Board has the power to construe and interpret the Incentive Plan
and, subject to the provisions of the Incentive Plan, to determine the persons
to whom and the dates on which options will be granted, the number of shares to
be subject to each option, the time or times during the term of each option
within which all or a portion of such option may be exercised, the exercise
price, the type of consideration and other terms of the option. The Board of
Directors is authorized to delegate administration of the Incentive Plan to a
committee composed of one or more members of the Board. The Board has delegated
administration of the Incentive Plan to the Compensation Committee of the Board.
As used herein with respect to the Incentive Plan, the "Board" refers to the
Compensation Committee as well as to the Board of Directors itself. In addition,
the Incentive Plan provides that, in the Board's discretion, directors who grant
options to employees covered under Section 162(m) of the Code ("Section 162(m)")
generally will be "outside directors" as defined in Section 162(m). See "Federal
Income Tax Information" below for a discussion of the application of Section
162(m).
ELIGIBILITY
Incentive stock options may be granted under the Incentive Plan only to
selected employees (including officers) of the Company and its affiliates.
Selected employees (including officers), directors and consultants are eligible
to receive all other types of awards under the Incentive Plan.
No incentive stock option may be granted under the Incentive Plan to any
person who, at the time of the grant, owns (or is deemed to own) stock
possessing more than 10% of the total combined voting power of the Company or
any affiliate of the Company, unless the option exercise price is at least 110%
of the fair market value of the stock subject to the option on the date of
grant, and the term of the option does not exceed five years from the date of
grant. In addition, for incentive stock options granted under the Incentive
Plan, the aggregate fair market value, determined at the time of grant, of the
shares of Common Stock with respect to which such options are exercisable for
the first time by an optionee during any calendar year (under all such plans of
the Company and its affiliates) may not exceed $100,000.
No person may be granted options under the Incentive Plan during any
calendar year to purchase in excess of 700,000 shares of Common Stock. This
limitation permits the Company under Section 162(m) to continue to be able to
deduct as a business expense certain compensation attributable to the exercise
of
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options granted under the Incentive Plan. See "Federal Income Tax Information"
below for a discussion of the application of Section 162(m).
STOCK SUBJECT TO THE INCENTIVE PLAN
The shares subject to the Incentive Plan may be unissued shares or
reacquired shares, bought on the market or otherwise. If options granted under
the Incentive Plan expire or otherwise terminate without being exercised, the
Common Stock not purchased pursuant to such options again becomes available for
issuance under the Incentive Plan.
TERMS OF OPTIONS
The following is a description of the permissible terms of options under
the Incentive Plan. Individual option grants may be more restrictive as to any
or all of the permissible terms described below.
Exercise Price; Payment. The exercise price of incentive stock options
under the Incentive Plan may not be less than the fair market value of the
Common Stock subject to the option on the date of the option grant, and in some
cases (see "Eligibility" above), may not be less than 110% of such fair market
value. The exercise price of nonstatutory options under the Incentive Plan may
not be less than 85% of the fair market value of the Common Stock subject to the
option on the date of the option grant. However, if options were granted with
exercise prices below market value, deductions for compensation attributable to
the exercise of such options could be limited by Section 162(m). See "Federal
Income Tax Information." At September 10, 1999, the closing price of the
Company's Common Stock as reported on the Nasdaq National Market was $107 per
share.
The exercise price of options granted under the Incentive Plan must be paid
either: (a) in cash at the time the option is exercised; or (b) at the
discretion of the Board (i) by delivery of other Common Stock of the Company,
(ii) pursuant to a deferred payment arrangement or (iii) in any other form of
legal consideration acceptable to the Board.
Option Exercise. Options granted under the Incentive Plan may become
exercisable in cumulative increments ("vest") as determined by the Board. Shares
covered by currently outstanding options under the Incentive Plan typically vest
at the rate of 1/60th per month (20% per year) with one-year cliff vesting,
during the optionee's employment or services as a consultant. Shares covered by
options granted in the future under the Incentive Plan may be subject to
different vesting terms. The Board has the power to accelerate the time during
which an option may be exercised. In addition, options granted under the
Incentive Plan may permit exercise prior to vesting, but in such event the
optionee may be required to enter into an early exercise stock purchase
agreement that allows the Company to repurchase shares not yet vested at their
exercise price should the optionee leave the employ of the Company before
vesting. To the extent provided by the terms of an option, an optionee may
satisfy any federal, state or local tax withholding obligation relating to the
exercise of such option by a cash payment upon exercise, by authorizing the
Company to withhold a portion of the stock otherwise issuable to the optionee,
by delivering already-owned stock of the Company or by a combination of these
means.
Term. The maximum term of options under the Incentive Plan is ten years,
except that in certain cases (see "Eligibility") the maximum term is five years.
Options under the Incentive Plan terminate three months after termination of the
optionee's employment or relationship as a consultant to the Company or any
affiliate of the Company, unless (a) such termination is due to such person's
disability, in which case the option may, but need not, provide that it may be
exercised at any time within one year of such termination; (b) the optionee dies
while employed by or serving as a consultant to the Company or any affiliate of
the Company, or within a period specified in the option after termination of
such relationship, in which case the option may, but need not, provide that it
may be exercised (to the extent the option was exercisable at the time of the
optionee's death) within eighteen months of the optionee's death by the person
or persons to whom the rights to such option pass by will or by the laws of
descent and distribution; or (c) the option by its terms specifically provides
otherwise. Individual options by their terms may provide for exercise within a
longer period of time
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following termination of employment or the consulting relationship. The option
term may also be extended in the event that exercise of the option within these
periods is prohibited for specified reasons.
TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK
Payment. The Board determines the purchase price under a restricted stock
purchase agreement but the purchase price may not be less than 85% of the fair
market value of the Company's Common Stock on the date of grant. The Board may
award stock bonuses in consideration of past services without a purchase
payment.
The purchase price of stock acquired pursuant to a restricted stock
purchase agreement under the Incentive Plan must be paid either in cash at the
time the option is exercised or at the discretion of the Board (i) pursuant to a
deferred payment arrangement or (ii) in any other form of legal consideration
acceptable to the Board.
Vesting. Shares of stock sold or awarded under the Incentive Plan may, but
need not be, subject to a repurchase option in favor of the Company in
accordance with a vesting schedule as determined by the Board. The Board has the
power to accelerate the vesting of stock acquired pursuant to a restricted stock
purchase agreement under the Incentive Plan.
ADJUSTMENT PROVISIONS
If there is any change in the stock subject to the Incentive Plan or
subject to any option granted under the Incentive Plan (through merger,
consolidation, reorganization, recapitalization, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or otherwise), the
Incentive Plan and options outstanding thereunder will be appropriately adjusted
as to the class and the maximum number of shares subject to such plan, the
maximum number of shares that may be granted to an employee during a calendar
year, and the class, number of shares and price per share of stock subject to
such outstanding options.
EFFECT OF CERTAIN CORPORATE EVENTS
The Incentive Plan provides that, in the event of a dissolution or
liquidation of the Company, specified type of merger or other corporate
reorganization, to the extent permitted by law, any surviving corporation will
be required to either assume awards outstanding under the Incentive Plan or
substitute similar awards for those outstanding under such plan, or such
outstanding awards will continue in full force and effect. In the event that any
surviving corporation declines to assume or continue awards outstanding under
the Incentive Plan, or to substitute similar awards, then the time during which
such awards may be exercised will be accelerated and the awards terminated if
not exercised during such time. The acceleration of awards in the event of an
acquisition or similar corporate event may be viewed as an antitakeover
provision, which may have the effect of discouraging a proposal to acquire or
otherwise obtain control of the Company.
DURATION, AMENDMENT AND TERMINATION
The Board may suspend or terminate the Incentive Plan without stockholder
approval or ratification at any time or from time to time. Unless sooner
terminated, the Incentive Plan will terminate on April 15, 2006.
The Board may also amend the Incentive Plan at any time or from time to
time. However, no amendment will be effective unless approved by the
stockholders of the Company within twelve months before or after its adoption by
the Board if the amendment would: (a) increase the number of shares reserved for
issuance upon exercise of options; (b) modify the requirements as to eligibility
for participation (to the extent such modification requires stockholder approval
in order for the Incentive Plan to satisfy Section 422 of the Code, if
applicable); or (c) change any other provision of the Incentive Plan in any
other way if such modification requires stockholder approval in order to comply
with Rule 16b-3 ("Rule 16b-3") of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or to satisfy the requirements of Section 422 of
the Code or any Nasdaq or securities exchange listing requirements. The Board
may submit any other amendment to the
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Incentive Plan for stockholder approval, including, but not limited to,
amendments intended to satisfy the requirements of Section 162(m) regarding the
exclusion of performance-based compensation from the limitation on the
deductibility of compensation paid to certain employees.
RESTRICTIONS ON TRANSFER
Under the Incentive Plan, an incentive stock option may not be transferred
by the optionee otherwise than by will or by the laws of descent and
distribution and, during the lifetime of the optionee, may be exercised only by
the optionee. A nonstatutory stock option may not be transferred except as
provided in the nonstatutory stock options grant form, or if such form does not
provide for transferability, then by will or by the laws of descent and
distribution. In any case, the optionee may designate in writing a third party
who may exercise the option in the event of the optionee's death. In addition,
shares subject to repurchase by the Company under an early exercise stock
purchase agreement may be subject to restrictions on transfer which the Board
deems appropriate. Rights under a stock bonus or restricted stock bonus
agreement may be transferred only as provided in the terms of the applicable
agreement.
FEDERAL INCOME TAX INFORMATION
Incentive Stock Options. Incentive stock options under the Incentive Plan
are intended to be eligible for the favorable federal income tax treatment
accorded "incentive stock options" under the Code.
There generally are no federal income tax consequences to the optionee or
the Company by reason of the grant or exercise of an incentive stock option.
However, the exercise of an incentive stock option may increase the optionee's
alternative minimum tax liability, if any.
If an optionee holds stock acquired through exercise of an incentive stock
option for more than two years from the date on which the option is granted and
more than one year from the date on which the shares are transferred to the
optionee upon exercise of the option, any gain or loss on a disposition of such
stock will be capital gain or loss. Generally, if the optionee disposes of the
stock before the expiration of either of these holding periods (a "disqualifying
disposition"), at the time of disposition, the optionee will realize taxable
ordinary income equal to the lesser of (a) the excess of the stock's fair market
value on the date of exercise over the exercise price, or (b) the optionee's
actual gain, if any, on the purchase and sale. The optionee's additional gain,
or any loss, upon the disqualifying disposition will be a capital gain or loss,
which will be long-term or short-term depending on how long the optionee holds
the stock. Long-term capital gains currently are generally subject to lower tax
rates than ordinary income. Slightly different rules may apply to optionees who
acquire stock subject to certain repurchase options or who are subject to
Section 16(b) of the Exchange Act.
To the extent the optionee recognizes ordinary income by reason of a
disqualifying disposition, the Company will generally be entitled (subject to
the requirement of reasonableness, the provisions of Section 162(m) and the
satisfaction of a tax reporting obligation) to a corresponding business expense
deduction in the tax year in which the disqualifying disposition occurs.
Nonstatutory Stock Options. Nonstatutory stock options granted under the
Incentive Plan generally have the following federal income tax consequences:
There are no tax consequences to the optionee or the Company by reason of
the grant of a nonstatutory stock option. Upon exercise of a nonstatutory stock
option, the optionee normally will recognize taxable ordinary income equal to
the excess of the stock's fair market value on the date of exercise over the
option exercise price. Generally, with respect to employees, the Company is
required to withhold from regular wages or supplemental wage payments an amount
based on the ordinary income recognized. Subject to the requirement of
reasonableness, the provisions of Section 162(m) and the satisfaction of a tax
reporting obligation, the Company will generally be entitled to a business
expense deduction equal to the taxable ordinary income realized by the optionee.
Upon disposition of the stock, the optionee will recognize a capital gain or
loss equal to the difference between the selling price and the sum of the amount
paid for such stock plus any amount recognized as ordinary income upon exercise
of the option. Such gain or loss will be long-term or short-term depending on
how long the optionee holds the stock. Slightly different rules may apply to
7
<PAGE> 10
optionees who acquire stock subject to certain repurchase options or who are
subject to Section 16(b) of the Exchange Act.
Potential Limitation on Company Deductions. Section 162(m) denies a
deduction to any publicly held corporation for compensation paid to certain
employees in a taxable year to the extent that compensation exceeds $1,000,000
for a covered employee. It is possible that compensation attributable to stock
options, when combined with all other types of compensation received by a
covered employee from the Company, may cause this limitation to be exceeded in
any particular year.
Certain kinds of compensation, including qualified "performance-based
compensation," are disregarded for purposes of the deduction limitation. In
accordance with Treasury regulations issued under Section 162(m), compensation
attributable to stock options will qualify as performance-based compensation,
provided that the option is granted by a compensation committee comprised solely
of "outside directors" and either: (i) the option plan contains a per-employee
limitation on the number of shares for which options may be granted during a
specified period, the per-employee limitation is approved by the stockholders,
and the exercise price of the option is no less than the fair market value of
the stock on the date of grant; or (ii) the option is granted (or exercisable)
only upon the achievement (as certified in writing by the compensation
committee) of an objective performance goal established in writing by the
compensation committee while the outcome is substantially uncertain, and the
option is approved by stockholders.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership
of the Company's Common Stock as of July 31, 1999 by: (i) each director and
nominee for director; (ii) each of the executive officers named in the Summary
Compensation Table; (iii) all executive officers and directors of the Company as
a group; and (iv) all those known by the Company to be beneficial owners of more
than five percent of its Common Stock.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP(1)
------------------------
NUMBER OF PERCENT OF
BENEFICIAL OWNER SHARES TOTAL
---------------- ---------- -----------
<S> <C> <C>
Pehong Chen(2).............................................. 6,375,000 24.0%
c/o BroadVision, Inc.
585 Broadway
Redwood City, CA 94063
Geo Capital LLC............................................. 1,782,100 7.0
767 Fifth Avenue, 45th Floor
New York, NY 10153
Pilgrim Baxter & Associates................................. 1,298,300 5.1
825 Duportail Road
Wayne, PA 19087
David L. Anderson(3)........................................ 255,236 1.0
Randall C. Bolten(4)........................................ 204,651 *
Clark W. Catelain(5)........................................ 203,700 *
Koh Boon Hwee(6)............................................ 189,108 *
Sandra Vaughan(7)........................................... 113,290 *
Yogen K. Dalal(8)........................................... 92,189 *
Todd A. Garrett(9).......................................... 80,000 *
Carl Pascarella(10)......................................... 50,000 *
All Directors and Executive Officers as a group (9
persons)(11).............................................. 7,563,174 27.9%
</TABLE>
- ---------------
* Less than one percent
(1) This table is based upon information supplied by officers, directors and
principal stockholders and Schedules 13D and 13G filed with the Securities
and Exchange Commission. Unless otherwise
8
<PAGE> 11
indicated in the footnotes to this table and subject to community property
laws where applicable, we believe that each of the stockholders named in
this table has sole voting and investment power with respect to the shares
indicated as beneficially owned. Applicable percentages are based on
25,561,291 shares outstanding on July 31, 1999. In computing the number of
shares beneficially owned by a person and the percentage ownership of that
person, shares of Common Stock subject to options held by that person that
are exercisable within 60 days are deemed outstanding. These shares,
however, are not deemed outstanding for the purpose of computing the
percentage ownership of any other person.
(2) Includes 1,000,000 shares of Common Stock issuable upon the exercise of a
stock option exercisable within 60 days of July 31, 1999, subject to
repurchase of unvested shares. Excludes 300,000 shares of Common Stock held
in trust by independent trustees for the benefit of Dr. Chen's children.
(3) Includes 42,384 shares of Common Stock owned by Sutter Hill Ventures, a
California Limited Partnership, over which Mr. Anderson, a director of
ours, exercises voting and investing power as a managing director of Sutter
Hill Ventures LLC, the general partner of Sutter Hill. Includes 126,446
shares of Common Stock held in a retirement trust over which Mr. Anderson
exercises voting and investing power. Includes 36,406 shares of Common
Stock owned by Anvest L.P., over which Mr. Anderson exercises voting and
investing power. Mr. Anderson disclaims beneficial ownership of the shares
of Common Stock held by the other persons and entities associated with
Sutter Hill,except to the extent of his pecuniary interest therein.
Includes 50,000 shares of Common Stock issuable upon the exercise of a
stock option exercisable within 60 days of July 31, 1999, subject to
repurchase of unvested shares.
(4) Includes 114,835 shares of Common Stock held in trust by Mr. Bolten and his
wife for their benefit and 47,983 shares of Common Stock issuable upon the
exercise of stock options exercisable within 60 days of July 31, 1999,
subject to repurchase of unvested shares.
(5) Includes 95,900 shares of Common Stock issuable upon the exercise of stock
options exercisable within 60 days of July 31, 1999, subject to repurchase
of unvested shares.
(6) Includes 60,000 shares of Common Stock held by Seven Seas Group Ltd., in
which Mr. Koh holds a controlling interest, and 50,000 shares of Common
Stock issuable upon the exercise of a stock option exercisable within 60
days of July 31, 1999, subject to repurchase of unvested shares.
(7) Includes 90,333 shares of Common Stock issuable upon the exercise of stock
options exercisable within 60 days of July 31, 1999, subject to repurchase
of unvested shares.
(8) Includes 46,733 shares of Common Stock held in a family trust over which
Mr. Dalal exercises voting and investing power. Includes 2,500 shares of
Common Stock held in a retirement trust over which Mr. Dalal exercises
voting and investing power, 50,000 shares of Common Stock issuable upon the
exercise of stock options exercisable within 60 days of July 31, 1999,
subject to repurchase of unvested shares.
(9) Includes 80,000 shares of Common Stock issuable upon the exercise of stock
options exercisable within 60 days of July 31, 1999, subject to repurchase
of unvested shares.
(10) Includes 50,000 shares of Common Stock issuable upon the exercise of a
stock option exercisable within 60 days of July 31, 1999, subject to
repurchase of unvested shares.
(11) Includes the information contained in the notes above, as applicable.
9
<PAGE> 12
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
Directors currently do not receive any cash compensation from the Company
for their services as members of the Board of Directors, although they are
reimbursed for certain expenses in connection with attendance at Board and
Committee meetings.
In January 1999, Mr. Garrett was granted a stock option to purchase 80,000
shares of the Company's Common Stock at an exercise price of $30.50 per share.
The option vest 25% on the one year anniversary of the vesting commencement date
and monthly thereafter over a three year period.
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY OF COMPENSATION
The following table shows, for the fiscal years ended December 31, 1996,
1997 and 1998, compensation awarded or paid to, or earned by, the Company's
Chief Executive Officer and its four other most highly compensated executive
officers at December 31, 1998 whose salary and bonus for the year ended December
31, 1998 exceeded $100,000 (the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
COMPENSATION(1) AWARDS
-------------------- ------------
ANNUAL SECURITIES
-------------------- UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#)
--------------------------- ---- --------- -------- ------------
<S> <C> <C> <C> <C>
Pehong Chen............................................. 1998 $200,000 $75,000 --
Chairman of the Board, President 1997 178,333 16,000 --
and Chief Executive Officer 1996 161,115 8,000 500,000
Randall C. Bolten....................................... 1998 154,008 36,000 39,000
Vice President, Finance and 1997 141,290 27,225 17,300
Chief Financial Officer 1996 128,129 19,225 --
Clark W. Catelain....................................... 1998 170,000 36,000 59,000
Vice President, Engineering 1997 155,025 25,450 13,800
1996 144,070 13,800 --
Sandra Vaughan(2)....................................... 1998 144,000 22,000 60,000
Vice President, Marketing 1997 135,017 14,700 20,000
1996 124,992 -- 40,000
</TABLE>
- ---------------
(1) Includes amounts earned but deferred at the election of the Named Executive
Officers under the Company's 401(k) plan.
(2) Ms. Vaughan was elected Vice President of Marketing in 1998.
10
<PAGE> 13
STOCK OPTION GRANTS AND EXERCISES
The Company grants options to its executive officers under the Incentive
Plan. The following tables show for the fiscal year ended December 31, 1998,
certain information regarding options granted to, exercised by, and held at year
end by, the Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------
PERCENT OF POTENTIAL REALIZABLE VALUE
NUMBER OF TOTAL OPTIONS AT ASSUMED ANNUAL RATES
SECURITIES GRANTED TO OF STOCK PRICE APPRECIATION
UNDERLYING EMPLOYEES IN EXERCISE PRICE FOR OPTION TERM(3)
OPTIONS FISCAL YEAR PER SHARE EXPIRATION ---------------------------
NAME GRANTED(#) (%)(1) ($/SH)(2) DATE 5%($) 10%($)
---- ---------- ------------- -------------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Randall C. Bolten(4)... 9,500 0.6 $ 6.500 1/2/08 $ 38,834 $ 98,414
9,500 0.6 7.813 2/2/08 46,679 118,293
20,000 1.3 7.813 2/2/08 98,271 249,038
Clark A. Catelain(4)... 9,500 0.6 6.500 1/2/08 38,834 98,414
9,500 0.6 7.813 1/2/08 46,679 118,293
40,000 2.5 7.813 2/2/08 196,542 498,075
Sandra Vaughan(4)...... 60,000 3.8 16.938 5/11/08 639,133 1,619,689
</TABLE>
- ---------------
(1) Based on options to purchase 1,588,050 shares granted in 1998.
(2) The exercise price per share of each option was equal to the closing sales
price of the Common Stock as quoted on the Nasdaq Stock Market's National
System on the day prior to the date of grant.
(3) The potential realizable value is based on the term of the option at its
time of grant (10 years). It is calculated by assuming that the stock price
on the date of grant appreciates at the indicated annual rate, compounded
annually for the entire term of the option and that the option is exercised
and sold on the last day of its term for the appreciated stock. The 5% and
10% columns represent assumed rates of appreciation only, in accordance with
the rules of the SEC, and do not reflect the Company's estimate or
projection of future stock price performance. Actual gains, if any, are
dependent on the actual future performance of the Company's Common Stock and
no gain to the optionee is possible unless the stock price increases over
the option term, which will benefit all stockholders.
(3) The options, which were granted under the Incentive Plan have a term of 10
years, subject to earlier termination in certain events related to
termination of employment, is immediately exercisable and vests over a
60-month period, with 20% of the shares vesting after one year, and 1/60 of
the shares vesting each month thereafter. The options will fully vest in the
event of a dissolution or liquidation or other corporate reorganization,
unless the acquiring company assumes the options or substitutes similar
options.
FISCAL YEAR-END OPTION VALUES OF UNEXERCISED OPTIONS
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING
SHARES UNEXERCISED OPTIONS AT VALUE OF UNEXERCISED
ACQUIRED DECEMBER 31, 1998 IN-THE-MONEY OPTIONS AT
ON VALUE (#)(2) DECEMBER 31, 1998(3)
EXERCISE RECEIVED --------------------------- ---------------------------
NAME (#) (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Pehong Chen.................... -- -- 500,000 0 $14,000,000 $0
Randall C. Bolten(4)........... 14,520 $ 58,172 41,780 0 1,033,926 0
Clark W. Catelain(4)........... -- -- 75,900 0 1,874,457 0
Sandra Vaughan(4).............. 22,333 195,661 97,667 0 1,848,387 0
</TABLE>
- ---------------
(1) Value realized is based on the per share deemed values of the Company's
Common Stock on the date of exercise, determined after the date of grant
solely for financial accounting purposes, minus the exercise price, without
taking into account any taxes that may be payable in connection the
transaction.
11
<PAGE> 14
(2) Reflects vested and unvested shares at December 31, 1998. Options granted
under the Incentive Plan are immediately exercisable, but are subject to the
Company's right to repurchase unvested shares on termination of employment.
(3) Fair market value of the Company's Common Stock at December 31, 1998
($32.00) minus the exercise price of the options.
(4) Reflects shares acquired upon the early exercise of stock options, some of
which are subject to a right of repurchase by the Company.
OTHER MATTERS
No other matters will be presented for consideration at the Special
Meeting.
By Order of the Board of Directors
/s/ Pehong Chen
Pehong Chen
Chairman of the Board, President and
Chief Executive Officer
September 16, 1999
12
<PAGE> 15
BROADVISION, INC.
EQUITY INCENTIVE PLAN
ADOPTED ON APRIL 16, 1996 AS AN
AMENDMENT AND RESTATEMENT OF THE STOCK OPTION PLAN
APPROVED BY STOCKHOLDERS ON JUNE 11, 1996
AMENDED BY THE BOARD OF DIRECTORS ON MARCH 11, 1998
APPROVED BY STOCKHOLDERS ON MAY 11, 1998
AMENDED BY THE BOARD OF DIRECTORS ON FEBRUARY 3, 1999
APPROVED BY STOCKHOLDERS ON MAY 12, 1999
AMENDED BY THE BOARD OF DIRECTORS ON AUGUST 31, 1999
APPROVED BY THE STOCKHOLDERS ON _________, 1999
TERMINATION DATE: APRIL 15, 2006
1. PURPOSES.
(a) The purpose of the Plan is to provide a means by which selected
Employees and Directors of and Consultants to the Company and its Affiliates may
be given an opportunity to benefit from increases in value of the stock of the
Company through the granting of (i) Incentive Stock Options, (ii) Nonstatutory
Stock Options, (iii) stock bonuses and (iv) rights to purchase restricted stock,
all as defined below.
(b) The Company, by means of the Plan, seeks to retain the services of
persons who are now Employees, Directors or Consultants, to secure and retain
the services of new Employees, Directors and Consultants, and to provide
incentives for such persons to exert maximum efforts for the success of the
Company and its Affiliates.
(c) The Company intends that the Stock Awards issued under the Plan
shall, in the discretion of the Board or any Committee to which responsibility
for administration of the Plan has been delegated pursuant to subsection 3(c),
be either (i) Options granted pursuant to Section 6 hereof, including Incentive
Stock Options and Nonstatutory Stock Options or (ii) stock bonuses or rights to
purchase restricted stock granted pursuant to Section 7 hereof. All Options
shall be separately designated Incentive Stock Options or Nonstatutory Stock
Options at the time of grant, and in such form as issued pursuant to Section 6,
and a separate certificate or certificates will be issued for shares purchased
on exercise of each type of Option.
2. DEFINITIONS.
(a) "AFFILIATE" means any parent corporation or subsidiary corporation,
whether now or hereafter existing, as those terms are defined in Sections 424(e)
and (f) respectively, of the Code.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CODE" means the Internal Revenue Code of 1986, as amended.
1
<PAGE> 16
(d) "COMMITTEE" means a Committee appointed by the Board in accordance
with subsection 3(c) of the Plan.
(e) "COMPANY" means BroadVision, Inc., a Delaware corporation.
(f) "CONSULTANT" means any person, including an advisor, engaged by the
Company or an Affiliate to render consulting services and who is compensated for
such services, provided that the term "Consultant" shall not include Directors
who are paid only a director's fee by the Company or who are not compensated by
the Company for their services as Directors.
(g) "CONTINUOUS SERVICE" (formerly "CONTINUOUS STATUS AS AN EMPLOYEE,
DIRECTOR OR CONSULTANT") means that the Participant's service with the Company
or an Affiliate, whether as an Employee, Director or Consultant, is not
interrupted or terminated. The Participant's Continuous Service shall not be
deemed to have terminated merely because of a change in the capacity in which
the Participant renders service to the Company or an Affiliate as an Employee,
Director, Consultant or a change in the entity for which the Participant renders
such service, provided that there is no interruption or termination of the
Participant's Continuous Service. For example, a change in status from an
Employee of the Company to a Consultant of an Affiliate or a Director of the
Company will not constitute an interruption of Continuous Service. The Board or
the chief executive officer of the Company, in that party's sole discretion, may
determine whether Continuous Service shall be considered interrupted in the case
of any leave of absence approved by that party, including sick leave, military
leave or any other personal leave.
(h) "COVERED EMPLOYEE" means the chief executive officer and the four
(4) other highest compensated officers of the Company for whom total
compensation is required to be reported to stockholders under the Exchange Act,
as determined for purposes of Section 162(m) of the Code.
(i) "DIRECTOR" means a member of the Board.
(j) "EMPLOYEE" means any person, including an Officer or Director,
employed by the Company or any Affiliate of the Company. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.
(k) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(l) "FAIR MARKET VALUE" means, as of any date, the value of the Common
Stock of the Company determined as follows:
(1) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the National
Market of The Nasdaq Stock Market, the Fair Market Value of a share of Common
Stock shall be the closing sales price for such stock (or the closing bid, if no
sales were reported) as quoted on such system or exchange (or the exchange with
the greatest volume of trading in Common Stock) on the last market trading day
prior to the day of determination, as reported in the Wall Street Journal or
such other source as the Board deems reliable;
2
<PAGE> 17
(2) If the Common Stock is quoted on The Nasdaq Stock Market
(but not on the National Market thereof) or is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a share of Common Stock shall be the mean between the bid and asked prices for
the Common Stock on the last market trading day prior to the day of
determination, as reported in the Wall Street Journal or such other source as
the Board deems reliable;
(3) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the Board.
(m) "INCENTIVE STOCK OPTION" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(n) "NON-EMPLOYEE DIRECTOR" means a Director of the Company who either
(i) is not a current Employee or Officer of the Company or its parent or a
subsidiary, does not receive compensation (directly or indirectly) from the
Company or its parent or a subsidiary for services rendered as a consultant or
in any capacity other than as a Director (except for an amount as to which
disclosure would not be required under Item 404(a) of Regulation S-K promulgated
pursuant to the Securities Act ("Regulation S-K")), does not possess an interest
in any other transaction as to which disclosure would be required under Item
404(a) of Regulation S-K and is not engaged in a business relationship as to
which disclosure would be required under Item 404(b) of Regulation S-K; or (ii)
is otherwise considered a "non-employee director" for purposes of Rule 16b-3.
(o) "NONSTATUTORY STOCK OPTION" means an Option not intended to qualify
as an Incentive Stock Option.
(p) "OFFICER" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(q) "OPTION" means a stock option granted pursuant to the Plan.
(r) "OPTION AGREEMENT" means a written agreement between the Company and
an Optionee evidencing the terms and conditions of an individual Option grant.
Each Option Agreement shall be subject to the terms and conditions of the Plan.
(s) "OPTIONEE" means an Employee, Director or Consultant who holds an
outstanding Option.
(t) "OUTSIDE DIRECTOR" means a Director of the Company who either (i) is
not a current employee of the Company or an "affiliated corporation" (within the
meaning of Treasury Regulations promulgated under Section 162(m) of the Code),
is not a former employee of the Company or an "affiliated corporation" receiving
compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an "affiliated corporation"
at any time and is not currently receiving direct or indirect remuneration from
the
3
<PAGE> 18
Company or an "affiliated corporation" for services in any capacity other than
as a Director or (ii) is otherwise considered an "outside director" for purposes
of Section 162(m) of the Code.
(u) "PLAN" means this BroadVision, Inc. 1996 Equity Incentive Plan.
(v) "RULE 16B-3" means Rule 16b-3 of the Exchange Act or any successor
to Rule 16b-3, as in effect when discretion is being exercised with respect to
the Plan.
(w) "SECURITIES ACT" means the Securities Act of 1933, as amended.
(x) "STOCK AWARD" means any right granted under the Plan, including any
Option, any stock bonus, any right to purchase restricted stock, and any Stock
Appreciation Right.
(y) "STOCK AWARD AGREEMENT" means a written agreement between the
Company and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to the
terms and conditions of the Plan
3. ADMINISTRATION.
(a) The Board shall administer the Plan unless and until the Board
delegates administration to a Committee, as provided in subsection 3(c).
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons eligible
under the Plan shall be granted Stock Awards; when and how each Stock Award
shall be granted; whether a Stock Award will be an Incentive Stock Option, a
Nonstatutory Stock Option, a stock bonus, a right to purchase restricted stock
or the provisions of each Stock Award granted (which need not be identical),
including the time or times when a person shall be permitted to receive stock
pursuant to a Stock Award; and the number of shares with respect to which a
Stock Award shall be granted to each such person.
(2) To construe and interpret the Plan and Stock Awards granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award Agreement,
in a manner and to the extent it shall deem necessary or expedient to make the
Plan fully effective.
(3) To amend the Plan or a Stock Award as provided in Section
13.
(4) Generally, to exercise such powers and to perform such acts
as the Board deems necessary or expedient to promote the best interests of the
Company which are not in conflict with the provisions of the Plan.
(c) (1) The Board may delegate administration of the Plan to a Committee
or Committees of one or more members of the Board, and the term "Committee"
shall apply to any
4
<PAGE> 19
person or persons to whom such authority has been delegated. If administration
is delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board,
including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to
the Board shall thereafter be to the Committee or subcommittee), subject,
however, to such resolutions, not inconsistent with the provisions of the Plan,
as may be adopted from time to time by the Board. The Board may abolish the
Committee at any time and revest in the Board the administration of the Plan.
(1) In the discretion of the Board, a Committee may consist
solely of two or more Outside Directors, in accordance with Section 162(m) of
the Code, and/or solely of two or more Non-Employee Directors, in accordance
with Rule 16b-3. Within the scope of such authority, the Board or the Committee
may (i) delegate to a committee of one or more members of the Board who are not
Outside Directors, the authority to grant Stock Awards to eligible persons who
are either (a) not then Covered Employees and are not expected to be Covered
Employees at the time of recognition of income resulting from such Stock Award
or (b) not persons with respect to whom the Company wishes to comply with
Section 162(m) of the Code and/or (ii) delegate to a committee of one or more
members of the Board who are not Non-Employee Directors the authority to grant
Stock Awards to eligible persons who are not then subject to Section 16 of the
Exchange Act.
4. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of Section 11 relating to adjustments upon
changes in stock, the stock that may be issued pursuant to Stock Awards shall
not exceed in the aggregate seven million eight hundred seventy-five thousand
(7,875,000) shares of the Company's Common Stock. If any Stock Award shall for
any reason expire or otherwise terminate, in whole or in part, without having
been exercised in full, the stock not acquired under such Stock Award shall
revert to and again become available for issuance under the Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
5. ELIGIBILITY.
(a) Incentive Stock Options appurtenant thereto may be granted only to
Employees. Stock Awards other than Incentive Stock Options may be granted to
Employees, Directors or Consultants.
(b) No person shall be eligible for the grant of an Incentive Stock
Option if, at the time of grant, such person owns (or is deemed to own pursuant
to Section 424(d) of the Code) stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or of any
of its Affiliates unless the exercise price of such Option is at
5
<PAGE> 20
least one hundred ten percent (110%) of the Fair Market Value of such stock at
the date of grant and the Option is not exercisable after the expiration of five
(5) years from the date of grant, or in the case of a restricted stock purchase
award, the purchase price is at least one hundred percent (100%) of the Fair
Market Value of such stock at the date of grant.
(c) Subject to the provisions of Section 11 relating to adjustments upon
changes in stock, following the expiration of the reliance period set forth in
Treasury Regulations section 1.162-27(f)(2), no person shall be eligible to be
granted Options covering more than seven hundred thousand (700,000) shares of
the Company's Common Stock in any calendar year.
(d) A Consultant shall not be eligible for the grant of a Stock Award
if, at the time of grant, a Form S-8 Registration Statement under the Securities
Act ("Form S-8") is not available to register either the offer or the sale of
the Company's securities to such Consultant because of the nature of the
services that the Consultant is providing to the Company, or because the
Consultant is not a natural person, or as otherwise provided by the rules
governing the use of Form S-8, unless the Company determines both (i) that such
grant (A) shall be registered in another manner under the Securities Act (e.g.,
on a Form S-3 Registration Statement) or (B) does not require registration under
the Securities Act in order to comply with the requirements of the Securities
Act, if applicable, and (ii) that such grant complies with the securities laws
of all other relevant jurisdictions.
6. OPTION PROVISIONS.
Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:
(a) TERM. No Incentive Stock Option shall be exercisable after the
expiration of ten (10) years from the date it was granted.
(b) PRICE. The exercise price of each Incentive Stock Option shall be
not less than one hundred percent (100%) of the Fair Market Value of the stock
subject to the Option on the date the Option is granted, and the exercise price
of a Nonstatutory Stock Option shall be not less than eighty-five percent (85%)
of the Fair Market Value of the stock subject to the Option on the date the
Option is granted. Notwithstanding the foregoing, an Option may be granted with
an exercise price lower than that set forth in the preceding sentence if such
Option is granted pursuant to an assumption or substitution for another option
in a manner satisfying the provisions of Section 424(a) of the Code.
(c) CONSIDERATION. The purchase price of stock acquired pursuant to an
Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the Option is exercised, or (ii) at
the discretion of the Board or the Committee, at the time of the grant of the
Option, (A) by delivery to the Company of other Common Stock of the Company, (B)
according to a deferred payment or other arrangement (which may include, without
limiting the generality of the foregoing, the use of other Common Stock of the
Company) with the person to whom the Option is granted or to whom the Option is
transferred pursuant to subsection 6(d), or (C) in any other form of legal
consideration that may be acceptable to the Board; provided, however, that at
any time that the Company is incorporated in Delaware, payment of the Common
Stock's "par value," as defined in the Delaware General Corporation Law, shall
not be made by deferred payment.
In the case of any deferred payment arrangement, interest shall be
compounded at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.
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<PAGE> 21
(d) TRANSFERABILITY. An Incentive Stock Option shall not be transferable
except by will or by the laws of descent and distribution, and shall be
exercisable during the lifetime of the person to whom the Incentive Stock Option
is granted only by such person. A Nonstatutory Stock Option shall be
transferable to the extent provided in the Option Agreement. If the Nonstatutory
Stock Option does not provide for transferability, then the Nonstatutory Stock
Option shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Optionholder
only by the Optionholder. Notwithstanding the foregoing, the person to whom the
Option is granted may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionee, shall thereafter be entitled to exercise the Option.
(e) VESTING. The total number of shares of stock subject to an Option
may, but need not, be allotted in periodic installments (which may, but need
not, be equal). The Option Agreement may provide that from time to time during
each of such installment periods, the Option may become exercisable ("vest")
with respect to some or all of the shares allotted to that period, and may be
exercised with respect to some or all of the shares allotted to such period
and/or any prior period as to which the Option became vested but was not fully
exercised. The Option may be subject to such other terms and conditions on the
time or times when it may be exercised (which may be based on performance or
other criteria) as the Board may deem appropriate. The provisions of this
subsection 6(e) are subject to any Option provisions governing the minimum
number of shares as to which an Option may be exercised.
(f) TERMINATION OF CONTINUOUS SERVICE. In the event an Optionee's
Continuous Service terminates (other than upon the Optionee's death or
disability), the Optionee may exercise his or her Option (to the extent that the
Optionee was entitled to exercise it at the date of termination) but only within
such period of time ending on the earlier of (i) the date three (3) months after
the termination of the Optionee's Continuous Service (or such longer or shorter
period specified in the Option Agreement), or (ii) the expiration of the term of
the Option as set forth in the Option Agreement. If, after termination, the
Optionee does not exercise his or her Option within the time specified in the
Option Agreement, the Option shall terminate, and the shares covered by such
Option shall revert to and again become available for issuance under the Plan.
An Optionee's Option Agreement may also provide that if the exercise of
the Option following the termination of the Optionee's Continuous Service (other
than upon the Optionee's death or disability) would be prohibited at any time
solely because the issuance of shares would violate the registration
requirements under the Securities Act, then the Option shall terminate on the
earlier of (i) the expiration of the term of the Option set forth in the first
paragraph of this subsection 6(f), or (ii) the expiration of a period of three
(3) months after the termination of the Optionee's Continuous Service during
which the exercise of the Option would not be in violation of such registration
requirements.
(g) DISABILITY OF OPTIONEE. In the event an Optionee's Continuous
Service terminates as a result of the Optionee's disability, the Optionee may
exercise his or her Option (to the extent that the Optionee was entitled to
exercise it at the date of termination), but only
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<PAGE> 22
within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in
the Option Agreement), or (ii) the expiration of the term of the Option as set
forth in the Option Agreement. If, at the date of termination, the Optionee is
not entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to and again become available
for issuance under the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the shares covered by such Option shall revert to and again
become available for issuance under the Plan.
(h) DEATH OF OPTIONEE. In the event of the death of an Optionee during,
or within a period specified in the Option after the termination of, the
Optionee's Continuous Service, the Option may be exercised (to the extent the
Optionee was entitled to exercise the Option at the date of death) by the
Optionee's estate, by a person who acquired the right to exercise the Option by
bequest or inheritance or by a person designated to exercise the option upon the
Optionee's death pursuant to subsection 6(d), but only within the period ending
on the earlier of (i) the date eighteen (18) months following the date of death
(or such longer or shorter period specified in the Option Agreement), or (ii)
the expiration of the term of such Option as set forth in the Option Agreement.
If, at the time of death, the Optionee was not entitled to exercise his or her
entire Option, the shares covered by the unexercisable portion of the Option
shall revert to and again become available for issuance under the Plan. If,
after death, the Option is not exercised within the time specified herein, the
Option shall terminate, and the shares covered by such Option shall revert to
and again become available for issuance under the Plan.
(i) EARLY EXERCISE. The Option may, but need not, include a provision
whereby the Optionee may elect at any time while an Employee, Director or
Consultant to exercise the Option as to any part or all of the shares subject to
the Option prior to the full vesting of the Option. Any unvested shares so
purchased may be subject to a repurchase right in favor of the Company or to any
other restriction the Board determines to be appropriate.
(j) RE-LOAD OPTIONS. Without in any way limiting the authority of the
Board or Committee to make or not to make grants of Options hereunder, the Board
or Committee shall have the authority (but not an obligation) to include as part
of any Option Agreement a provision entitling the Optionee to a further Option
(a "Re-Load Option") in the event the Optionee exercises the Option evidenced by
the Option agreement, in whole or in part, by surrendering other shares of
Common Stock in accordance with this Plan and the terms and conditions of the
Option Agreement. Any such Re-Load Option (i) shall be for a number of shares
equal to the number of shares surrendered as part or all of the exercise price
of such Option; (ii) shall have an expiration date which is the same as the
expiration date of the Option the exercise of which gave rise to such Re-Load
Option; and (iii) shall have an exercise price which is equal to one hundred
percent (100%) of the Fair Market Value of the Common Stock subject to the
Re-Load Option on the date of exercise of the original Option. Notwithstanding
the foregoing, a Re-Load Option which is an Incentive Stock Option and which is
granted to a 10% stockholder (as described in subsection 5(b)), shall have an
exercise price which is equal to one hundred ten percent (110%) of the Fair
Market Value of the stock subject to the Re-Load Option on the date of exercise
of the original Option and shall have a term which is no longer than five (5)
years.
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<PAGE> 23
Any such Re-Load Option may be an Incentive Stock Option or a
Nonstatutory Stock Option, as the Board or Committee may designate at the time
of the grant of the original Option; provided, however, that the designation of
any Re-Load Option as an Incentive Stock Option shall be subject to the one
hundred thousand dollar ($100,000) annual limitation on exercisability of
Incentive Stock Options described in subsection 10(d) of the Plan and in Section
422(d) of the Code. There shall be no Re-Load Options on a Re-Load Option. Any
such Re-Load Option shall be subject to the availability of sufficient shares
under subsection 4(a) and shall be subject to such other terms and conditions as
the Board or Committee may determine which are not inconsistent with the express
provisions of the Plan regarding the terms of Options.
7. TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK.
Each stock bonus or restricted stock purchase agreement shall be in such
form and shall contain such terms and conditions as the Board or the Committee
shall deem appropriate. The terms and conditions of stock bonus or restricted
stock purchase agreements may change from time to time, and the terms and
conditions of separate agreements need not be identical, but each stock bonus or
restricted stock purchase agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions as appropriate:
(a) PURCHASE PRICE. The purchase price under each restricted stock
purchase agreement shall be such amount as the Board or Committee shall
determine and designate in such agreement but in no event shall the purchase
price be less than eighty-five percent (85%) of the stock's Fair Market Value on
the date such award is made. Notwithstanding the foregoing, the Board or the
Committee may determine that eligible participants in the Plan may be awarded
stock pursuant to a stock bonus agreement in consideration for past services
actually rendered to the Company for its benefit.
(b) TRANSFERABILITY. Rights to acquire shares under the stock bonus or
restricted stock purchase agreement shall be transferable only upon such terms
and conditions as are set forth in the agreement, as the Board shall determine
in its discretion, so long as stock awarded under the agreement remains subject
to the terms of the agreement.
(c) CONSIDERATION. The purchase price of stock acquired pursuant to a
stock purchase agreement shall be paid either: (i) in cash at the time of
purchase; (ii) at the discretion of the Board or the Committee, according to a
deferred payment or other arrangement with the person to whom the stock is sold;
or (iii) in any other form of legal consideration that may be acceptable to the
Board or the Committee in its discretion; provided, however, that at any time
that the Company is incorporated in Delaware, payment of the Common Stock's "par
value," as defined in the Delaware General Corporation Law, shall not be made by
deferred payment.. Notwithstanding the foregoing, the Board or the Committee to
which administration of the Plan has been delegated may award stock pursuant to
a stock bonus agreement in consideration for past services actually rendered to
the Company or for its benefit.
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<PAGE> 24
(d) VESTING. Shares of stock sold or awarded under the Plan may, but
need not, be subject to a repurchase option in favor of the Company in
accordance with a vesting schedule to be determined by the Board or the
Committee.
(e) TERMINATION OF CONTINUOUS SERVICE. In the event a Participant's
Continuous Service terminates, the Company may repurchase or otherwise reacquire
any or all of the shares of stock held by that person which have not vested as
of the date of termination under the terms of the stock bonus or restricted
stock purchase agreement between the Company and such person.
8. COVENANTS OF THE COMPANY.
(a) During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of stock required to satisfy such
Stock Awards.
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the Stock Award; provided,
however, that this undertaking shall not require the Company to register under
the Securities Act either the Plan, any Stock Award or any stock issued or
issuable pursuant to any such Stock Award. If, after reasonable efforts, the
Company is unable to obtain from any such regulatory commission or agency the
authority which counsel for the Company deems necessary for the lawful issuance
and sale of stock under
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<PAGE> 25
the Plan, the Company shall be relieved from any liability for failure to issue
and sell stock upon exercise of such Stock Awards unless and until such
authority is obtained.
9. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to Stock Awards shall
constitute general funds of the Company.
10. MISCELLANEOUS.
(a) The Board shall have the power to accelerate the time at which a
Stock Award may first be exercised or the time during which a Stock Award or any
part thereof will vest pursuant to subsection 6(e) or 7(d) notwithstanding the
provisions in the Stock Award stating the time at which it may first be
exercised or the time during which it will vest.
(b) No Employee, Director, Consultant or other person to whom a Stock
Award is transferred in accordance with the Plan shall be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any shares
subject to such Stock Award unless and until such person has exercised the Stock
Award pursuant to its terms.
(c) Nothing in the Plan or any instrument executed or Stock Award
granted pursuant thereto shall confer upon any Participant any right to continue
to serve the Company or an Affiliate in the capacity in effect at the time the
Stock Award was granted or shall affect the right of the Company or an Affiliate
to terminate (i) the employment of an Employee with or without notice and with
or without cause, (ii) the service of a Consultant pursuant to the terms of such
Consultant's agreement with the Company or an Affiliate or (iii) the service of
a Director pursuant to the Bylaws of the Company or an Affiliate, and any
applicable provisions of the corporate law of the state in which the Company or
the Affiliate is incorporated, as the case may be.
(d) To the extent that the aggregate Fair Market Value (determined at
the time of grant) of stock with respect to which Incentive Stock Options are
exercisable for the first time by any Optionee during any calendar year under
all plans of the Company and its Affiliates exceeds one hundred thousand dollars
($100,000), the Options or portions thereof which exceed such limit (according
to the order in which they were granted) shall be treated as Nonstatutory Stock
Options.
(e) The Company may require any person to whom a Stock Award is granted,
or any person to whom a Stock Award is transferred in accordance with the Plan,
as a condition of exercising or acquiring stock under any Stock Award, ( to give
written assurances satisfactory to the Company as to such person's knowledge and
experience in financial and business matters and/or to employ a purchaser
representative reasonably satisfactory to the Company who is knowledgeable and
experienced in financial and business matters, and that he or she is capable of
evaluating, alone or together with the purchaser (f)representative, the merits
and risks of exercising the Stock Award; and ( to give written assurances
satisfactory to the Company stating that such person is acquiring the stock
subject to the Stock Award for such person's own account and not with any
present intention of selling or otherwise distributing the stock. The foregoing
requirements, and any assurances given pursuant to such requirements, shall be
inoperative if
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<PAGE> 26
(i) the issuance of the shares upon the exercise or acquisition of stock under
the Stock Award has been registered under a then currently effective
registration statement under the Securities Act, or (ii) as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then applicable
securities laws. The Company may, upon advice of counsel to the Company, place
legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the stock.
(f) To the extent provided by the terms of a Stock Award Agreement, the
person to whom a Stock Award is granted may satisfy any federal, state or local
tax withholding obligation relating to the exercise or acquisition of stock
under a Stock Award by any of the following means or by a combination of such
means: (1) tendering a cash payment; (2) authorizing the Company to withhold
shares from the shares of the Common Stock otherwise issuable to the participant
as a result of the exercise or acquisition of stock under the Stock Award; or
(3) delivering to the Company owned and unencumbered shares of the Common Stock
of the Company. Notwithstanding the foregoing, the Company shall not be
authorized to withhold shares of Common Stock at rates in excess of the minimum
statutory withholding rates for federal and state tax purposes, including
payroll taxes.
11. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or subject
to any Stock Award, without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company), the Plan will be appropriately adjusted in the class(es) and maximum
number of shares subject to the Plan pursuant to subsection 4(a) and the maximum
number of shares subject to award to any person during any calendar year
pursuant to subsection 5(c), and the outstanding Stock Awards will be
appropriately adjusted in the class(es) and number of shares and price per share
of stock subject to such outstanding Stock Awards. Such adjustments shall be
made by the Board or the Committee, the determination of which shall be final,
binding and conclusive. (The conversion of any convertible securities of the
Company shall not be treated as a "transaction not involving the receipt of
consideration by the Company".)
(b) In the event of: (1) a dissolution, liquidation or sale of
substantially all of the assets of the Company; (2) a merger or consolidation in
which the Company is not the surviving corporation; or (3) a reverse merger in
which the Company is the surviving corporation but the shares of the Company's
Common Stock outstanding immediately preceding the merger are converted by
virtue of the merger into other property, whether in the form of securities,
cash or otherwise, then to the extent permitted by applicable law: (i) any
surviving corporation or an Affiliate of such surviving corporation shall assume
any Stock Awards outstanding under the Plan or shall substitute similar Stock
Awards for those outstanding under the Plan, or (ii) such Stock Awards shall
continue in full force and effect. In the event any surviving corporation and
its Affiliates refuse to assume or continue such Stock Awards, or to substitute
similar options for those outstanding under the Plan, then, with respect to
Stock Awards held by persons then
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<PAGE> 27
performing services as Employees, Directors or Consultants, the time during
which such Stock Awards may be exercised shall be accelerated and the Stock
Awards terminated if not exercised prior to such event.
12. AMENDMENT OF THE PLAN AND STOCK AWARDS.
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 11 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the stockholders of
the Company within twelve (12) months before or after the adoption of the
amendment, where the amendment will:
(i) Increase the number of shares reserved for Stock Awards
under the Plan;
(ii) Modify the requirements as to eligibility for participation
in the Plan (to the extent such modification requires stockholder approval in
order for the Plan to satisfy the requirements of Section 422 of the Code); or
(iii) Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to satisfy the requirements
of Section 422 of the Code or any Nasdaq or securities exchange listing
requirements, or to comply with the requirements of Rule 16b-3.
(b) The Board may in its sole discretion submit any other amendment to
the Plan for stockholder approval, including, but not limited to, amendments to
the Plan intended to satisfy the requirements of Section 162(m) of the Code and
the regulations promulgated thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.
(c) It is expressly contemplated that the Board may amend the Plan in
any respect the Board deems necessary or advisable to provide eligible
Employees, Directors or Consultants with the maximum benefits provided or to be
provided under the provisions of the Code and the regulations promulgated
thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.
(d) Rights and obligations under any Stock Award granted before
amendment of the Plan shall not be impaired by any amendment of the Plan unless
(i) the Company requests the consent of the person to whom the Stock Award was
granted and (ii) such person consents in writing.
(e) The Board at any time, and from time to time, may amend the terms of
any one or more Stock Award; provided, however, that the rights and obligations
under any Stock Award shall not be impaired by any such amendment unless (i) the
Company requests the consent of the person to whom the Stock Award was granted
and (ii) such person consents in writing.
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<PAGE> 28
13. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate ten (10) years from the date the
Plan is adopted by the Board or approved by the stockholders of the Company,
whichever is earlier. No Stock Awards may be granted under the Plan while the
Plan is suspended or after it is terminated.
(b) Rights and obligations under any Stock Award granted while the Plan
is in effect shall not be impaired by suspension or termination of the Plan,
except with the consent of the person to whom the Stock Award was granted.
14. EFFECTIVE DATE OF PLAN.
The Plan shall become effective on the same day that the Company's
initial public offering of shares of Common Stock becomes effective, but no
Stock Awards granted under the Plan shall be exercised unless and until the Plan
has been approved by the stockholders of the Company, which approval shall be
within twelve (12) months before or after the date the Plan is adopted by the
Board.
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<PAGE> 29
BROADVISION, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 29, 1999
The undersigned hereby appoints Pehong Chen and Randall Bolten, and each of
them, as attorneys and proxies of the undersigned, with full power of
substitution, to vote all of the shares of stock of BroadVision, Inc. which the
undersigned may be entitled to vote at the Special Meeting of Stockholders of
BroadVision, Inc. to be held at the Company's offices at 585 Broadway, Redwood
City, California 94063 on Wednesday, September 29, 1999 at 2:00 p.m. local time,
and at any and all postponements, continuations and adjournments thereof, with
all powers that the undersigned would possess if personally present, upon and in
respect of the following matters and in accordance with the following
instructions.
Unless a contrary direction is indicated, this Proxy will be voted for
Proposals 1 and 2, as more specifically described in the Proxy Statement. If
specific instructions are indicated, this Proxy will be voted in accordance
therewith.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
PROPOSAL 1: To approve an amendment to the Company's Amended and Restated
Certificate of Incorporation to increase the authorized number of
shares of Common Stock to 500,000,000 shares and Preferred Stock to
10,000,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 30
PROPOSAL 2: To approve the Company's Equity Incentive Plan, as amended, to
increase the aggregate number of shares of Common Stock authorized
for issuance thereunder by 1,000,000 shares and to allow the
Company to grant stock options and certain other stock awards to
non-employee directors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Dated:
-----------------------------------------------------------------------,
1999
-------------------------
-------------------------
Signature(s)
Please sign exactly as
your name appears hereon.
If the stock is
registered in the names
of two or more persons,
each should sign.
Executors,
administrators, trustees,
guardians and
attorneys-in-fact should
add their titles. If
signer is a corporation,
please give full
corporate name and have a
duly authorized officer
sign, stating title. If
signer is a partnership,
please sign in
partnership name by
authorized person.
PLEASE VOTE, DATE, SIGN AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN
ENVELOPE
THAT IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
