UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Year Ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-28252
BROADVISION, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-3184303
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
585 Broadway, Redwood City, California 94063
- -------------------------------------- -----
(Address of principal executive offices) (Zip Code)
(650) 261-5100
--------------
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange which registered
- ------------------- --------------------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.0001 par value
------------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ X ] No [ ]
Indicate by check mark if the disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
Based on the closing sales price of March 24, 2000 the aggregate market value of
the voting stock held by nonaffiliates of the registrant was $16,841,974,970.
As of March 24, 2000, registrant had outstanding 248,359,090 shares of Common
Stock.
<PAGE>
BROADVISION, INC.
SUPPLEMENT TO
ANNUAL REPORT ON FORM 10-K
YEAR ENDED DECEMBER 31, 1999
BroadVision, Inc. hereby amends its Annual Report on Form 10-K for the year
ended December 31, 1999 (the "Form 10-K") to add the information required by
Part III of Form 10-K.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
Directors. The following is certain information about the current members of
the Company's Board of Directors.
<CAPTION>
Principal Occupation/
Name Age Position Held With the Company
---- --- ------------------------------
<S> <C> <C>
Pehong Chen........................ 42 Chairman of the Board of Directors, President
and Chief Executive Officer
David L. Anderson.................. 56 General Partner, Sutter Hill Ventures
Yogen K. Dalal..................... 49 General Partner, Mayfield Fund
Todd A. Garrett.................... 58 Private Consultant and retired Senior Vice
President and Chief Information Officer,
Proctor & Gamble Co.
Koh Boon Hwee...................... 49 Executive Chairman, Wuthelam Group of Companies
Klaus Luft ........................ 58 President, Market Access for Technology
Services GmbH
Carl Pascarella.................... 47 President and Chief Executive Officer of Visa
USA
</TABLE>
Pehong Chen has served as Chairman of the Board, Chief Executive Officer and
President of the Company since its incorporation in May 1993. From 1992 to 1993,
Dr. Chen served as the Vice President of Multimedia Technology at Sybase, a
supplier of client-server software products. Dr. Chen founded and, from 1989 to
1992, served as President of Gain Technology, a provider of multimedia
applications development systems, which was acquired by Sybase. He received a
B.S. in Computer Science from National Taiwan University, an M.S. in Computer
Science from Indiana University, and a Ph.D. in Computer Science from the
University of California at Berkeley.
David L. Anderson has served as a director of the Company since November
1993. Since 1974, Mr. Anderson has been a managing director of Sutter Hill
Ventures, a venture capital investment firm. Mr. Anderson currently serves on
the Board of Directors of Cytel Corporation, Dionex Corporation, and Molecular
Devices Corporation. He holds a B.S. in Electrical Engineering from the
Massachusetts Institute of Technology and an M.B.A. from Harvard University.
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<PAGE>
Yogen K. Dalal has served as a director of the Company since November 1993.
He joined Mayfield Fund ("Mayfield"), a venture capital firm, in September 1991
and has been a general partner of several venture capital funds affiliated with
Mayfield since November 1992. Dr. Dalal holds a B.S. in Electrical Engineering
from the India Institute of Technology, Bombay, and an M.S. and a Ph.D. in
Electrical Engineering and Computer Science from Stanford University.
Todd A. Garrett has served as director of the Company since January 1999.
Mr. Garrett is currently a private consultant. In 1999, Mr. Garret retired from
Proctor & Gamble Company where he held various key executive positions within
the company since joining the company in 1985. These positions included: Vice
President, Asia/Pacific; Vice President, US Beauty Care; Group President,
President of Worldwide Strategic Planning, Beauty Care Products and Senior Vice
President. In October 1996, he was appointed to the post of Chief Information
Officer. Mr. Garrett holds a B.A. from the University of Rochester and an M.B.A.
from Xavier University.
Koh Boon Hwee has served as a director of the Company since February 1996.
Since 1991, Mr. Koh has been Executive Chairman of the Wuthelam Group of
Companies, a diversified Singapore company with subsidiaries engaged in, among
other things, real estate development, hotel management, and high technology.
Since 1992, he has also served as Chairman of the Board of Singapore
Telecommunications, Ltd. Mr. Koh currently serves on the Board of Directors of
Excel Machine Tools Ltd., Raffles Medical Group Ltd., and Qad Inc. Mr. Koh holds
a B.S. in Mechanical Engineering from the University of London and an M.B.A.
from Harvard University.
Klaus Luft has served as a director of the Company since February 2000. Mr.
Luft is the founder, owner and President of MATCH (Market Access for Technology
Services GmbH), a private company in Munich, Germany that provides sales and
marketing services to high technology companies. He is also the founder and
Chairman of the supervisory board of Artedona AG, a privately held company
e-commerce established in 1999 and headquartered in Munich. Since August 1990,
Mr. Luft as served as Vice Chairman and international Advisor to Goldman Sachs
Europe Limited. He also serves on the board of directors of Dell Computer
Corporation and Sagent Technology Inc. Mr. Luft is also a member of the
International Advisory Board of the Business School of International University
of Germany.
Carl Pascarella has served as a director of the Company since September
1997. Since August 1993, Mr. Pascarella has been President and Chief Executive
Officer of Visa USA. From January 1983 to August 1993, he was Assistant Chief
General Manager of the Asia-Pacific region of Visa USA. Before joining Visa USA,
Mr. Pascarella was Vice President of the International Division of Crocker
National Bank. He also served as Vice President of Metropolitan Bank at
BankersTrust Company. Mr. Pascarella holds a B.A. from the University of Buffalo
and an M.B.A. from Harvard University.
Executive Officers. The names of and certain information about the current
executive officers of the Company are set forth under Item 1 of Part I of this
Form 10-K under the heading "Employees; Executive Officers." The following
person has been appointed as an executive officer of the Company since the
original filing of the Form 10-K:
Jaime A. Ellertson, 43, became Executive Vice President and Chief Strategy
Officer of the Company on April 14, 2000 when the Company completed its
acquisition of Interleaf, Inc., a provider of enterprise-wide software tools for
e-content management. Before then, Mr. Ellertson served as President and Chief
Executive Officer and a director of Interleaf since January 1997. From July 1996
to January 1997, he served as Chairman of Purview Technologies, Inc., an
internet monitoring, management and analysis company. Mr. Ellertson was
President and Chief Executive Officer of Tartan, Inc., a developer of compilers,
from January 1996 to June 1996. From July 1990 to December 1996, he served as
President and Chief Executive Officer of Openware Technologies, Inc., a
developer of software and provider of services.
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<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of a registered class of
the Company's equity securities, to file with the SEC initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Officers, directors and greater than 10% stockholders
are required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1999, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10% beneficial owners were complied with, except: one Form 4 was
filed late by Mr. Bolten and two Forms 4 were filed late by Sandra Vaughan, Vice
President, Corporate Marketing and formerly an executive officer of the Company.
ITEM 11. 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
720,000 shares of the Company's Common Stock at an exercise price of $3.389 per
share. In February, 2000, Mr. Luft was granted a stock option to purchase
240,000 shares of the Company's Common Stock at an exercise price of $49.75 per
share. The options vest 25% on the one year anniversary of the vesting
commencement date and monthly thereafter over a three year period.
Compensation of Executive Officers
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<PAGE>
SUMMARY OF COMPENSATION
<TABLE>
The following table shows, for the fiscal years ended December 31,
1999, 1998, and 1997, compensation awarded or paid to, or earned by, the
Company's Chief Executive Officer and its three other persons who were executive
officers at December 31, 1999 and whose salary and bonus for the year ended
December 31, 1999 exceeded $100,000 (the "Named Executive Officers"):
<CAPTION>
Summary Compensation Table
Long-Term
Compensation
Compensation(1) Awards
--------------- ------
Securities
Annual Underlying
Name and Principal Position Year Salary ($) Bonus ($) Options (#)
--------------------------- ---- ---------- --------- -----------
<S> <C> <C> <C> <C>
Pehong Chen................................ 1999 $ 246,034 $106,250 4,500,000
Chairman of the Board, President.......... 1998 200,000 75,000 --
And Chief Executive Officer............... 1997 178,333 16,000
Randall C. Bolten.......................... 1999 170,456 37,500 180,000
Vice President, Finance and............... 1998 154,008 36,000 351,000
Chief Financial Officer................... 1997 141,190 27,225 155,700
Clark W. Catelain.......................... 1999 188,308 40,000 180,000
Vice President, Engineering............... 1998 170,000 36,000 531,000
1997 155,025 25,450 124,200
Sandra Vaughan(2).......................... 1999 157,942 33,000 94,500
Vice President, Marketing................. 1998 144,000 22,000 540,000
1997 135,017 14,700 180,000
<FN>
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(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.
</FN>
</TABLE>
STOCK OPTION GRANTS AND EXERCISES
In addition to the Incentive Plan, the Company may also grant stock
options to non-officer employees under its 2000 Non-Officer Equity Incentive
Plan (the "Non-Officer Plan"). The Non-Officer Plan authorized the issuance of
6,000,000 shares of the Company's Common Stock. Only employees of the Company
who are not officers or directors are eligible to receive options under the
Non-Officer Plan, unless the option is an inducement essential to an officer's
entering into an employment contract with the Company. Options granted under the
Non-Officer Plan are not intended by the Company to qualify as incentive stock
options under the Code. As of March 31, 2000, there were no outstanding options
to purchase shares under the Non-Officer Plan and options to purchase 6,000,000
shares remained available for future grant under the Non-Officer Plan. As of
March 31, 2000, options to purchase a total of 17,604,270 shares had been
granted outside of the Incentive Plan and the Non-Officer Plan and were
outstanding.
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<PAGE>
<TABLE>
The following tables show for the fiscal year ended December 31, 1999,
certain information regarding options granted to, exercised by, and held at year
end by, the Named Executive Officers:
Option Grants In Last Fiscal Year
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term (3)
------------------------------------------------------------ -------------------------------
Percent of
Total
Number of Options
Securities Granted to Exercise
Underlying Employees Price Per
Options in Fiscal Share ($/Sh)
Name Granted (#) Year % (1) (2) Expiration Date 5% ($) 10% ($)
---- ----------- ---------- --- --------------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Pehong Chen(4) 4,500,000 15.0 $ 6.667 6/24/09 $18,866,933 $47,812,513
Randall C. Bolten(4) 180,000 0.6 4.750 5/26/09 537,704 1,362,650
Clark A. Catelain(4) 180,000 0.6 4.750 5/26/09 537,704 1,362,650
Sandra Vaughan(4) 90,000 0.3 4.750 5/26/09 268,852 981,328
4,500 0.0 34.958 12/10/09 98,933 250,715
<FN>
- ----------
(1) Based on options to purchase 29,970,300 shares granted in 1999.
(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
Market 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.
(4) The options 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.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Fiscal Year-End Option Values Of Unexercised Options
Number of Securities Underlying
Unexercised Options at Value of Unexercised
December 31, 1999 In-the-Money Options at
Shares (#)(2) December 31, 1999 (3)
Acquired On Value ------------------------------ ----------------------------
Name Exercise (#) Received (1) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Pehong Chen............... -- -- 9,000,000 $0 $510,187,500 $0
Randall C. Bolten(4)...... 235,863 $1,362,650 320,157 0 18,148,899 0
Clark W. Catelain(4)...... -- -- 864,300 0 0
48,995,006
Sandra Vaughan(4)......... 457,866 7,140,595 515,637 0 0
29,230,172
<FN>
- ------------------
(1) Value received 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.
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<PAGE>
(2) Reflects vested and unvested shares at December 31, 1999. Options granted
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, 1999
($56.6875) 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.
</FN>
</TABLE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
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 March 31, 2000 by: (i) each
director; (ii) each of the executive officers named in the Summary Compensation
Table under Part III, Item 11 above; (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 5% of its Common Stock.
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<PAGE>
<TABLE>
<CAPTION>
Beneficial Ownership(1)
-----------------------
Number of Percent of
Beneficial Owner Shares Total
---------------- ------ -----
<S> <C> <C>
Pehong Chen(2).................................................... 57,375,000 22.2%
David L. Anderson(8).............................................. 2,021,415 *
Koh Boon Hwee(4).................................................. 1,701,972 *
Randall C. Bolten(5).............................................. 1,671,825 *
Clark W. Catelain(6).............................................. 1,476,600 *
Sandra Vaughan(7)................................................. 889,101 *
Todd A. Garrett(8)................................................ 540,000 *
Yogen K. Dalal(9)................................................. 529,701 *
Carl Pascarella(10)............................................... 450,000 *
Klaus Luft(12).................................................... 240,000 *
All Directors and Executive Officers as a group (10 persons)(13).. 66,518,109 25.40%
<FN>
- ------------------
* Less than one percent
(1) This table is based upon information supplied by officers, directors and
principal stockholders and Schedules 13D, 13F and 13G filed with the
Securities and Exchange Commission (the "SEC"). Unless otherwise indicated
in the footnotes to this table and subject to community property laws where
applicable, the Company believes 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
261,890,074,, shares outstanding on March 31, 2000, adjusted as required by
rules promulgated by the SEC.
(2) Includes 9,000,000 shares of Common Stock issuable upon the exercise of
stock options exercisable within 60 days of March 31, 2000, subject to
repurchase of unvested shares. Excludes 2,700,000 shares of Common Stock
held in trust by independent trustees for the benefit of Dr. Chen's
children.
(3) Includes 1,138,014 shares of Common Stock held in a retirement trust over
which Mr. Anderson exercises voting and investing power. Includes 327,771
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 178,125 shares of Common Stock issuable upon the
exercise of a stock option exercisable within 60 days of March 31, 2000,
subject to repurchase of unvested shares.
(4) Includes 540,000 shares of Common Stock held by Seven Seas Group Ltd., in
which Mr. Koh holds a controlling interest, and 450,000 shares of Common
Stock issuable upon the exercise of a stock option exercisable within 60
days of March 31, 2000, subject to repurchase of unvested shares.
(5) Includes 976,728 shares of Common Stock held in trust by Mr. Bolten and his
wife for their benefit and 251,757 shares of Common Stock issuable upon the
exercise of stock options exercisable within 60 days of March 31, 2000,
subject to repurchase of unvested shares.
(6) Includes 863,700 shares of Common Stock issuable upon the exercise of stock
options exercisable within 60 days of March 31, 2000, subject to repurchase
of unvested shares.
(7) Includes 516,237 shares of Common Stock issuable upon the exercise of stock
options exercisable within 60 days of March 31, 2000, subject to repurchase
of unvested shares.
(8) Includes 540,000 shares of Common Stock issuable upon the exercise of a
stock option exercisable within 60 days of March 31, 2000, subject to
repurchase of unvested shares.
(9) Includes 57,201 shares of Common Stock held in a family trust over which
Mr. Dalal exercises voting and investing power. Includes 22,500 shares of
Common Stock held in a retirement trust over which Mr. Dalal exercises
voting and investing power, and 450,000 shares of Common Stock issuable
upon the exercise of a stock option exercisable within 60 days of March 31,
2000, subject to repurchase of unvested shares.
(10) Includes 450,000 shares of Common Stock issuable upon the exercise of a
stock option exercisable within 60 days of March 31, 2000, subject to
repurchase of unvested shares.
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<PAGE>
(11) Includes 240,000 shares of Common Stock issuable upon the exercise of a
stock option exercisable within 60 days of March 31, 2000, subject to
repurchase of unvested shares.
(12) Includes the information contained in the notes above, as applicable.
</FN>
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has entered into indemnity agreements with certain officers and
directors of the Company which provide, among other things, that the Company
will indemnify such officer or director, under the circumstances and to the
extent provided for therein, for expenses, judgments, fines and settlements that
he may be required to pay in actions or proceedings which he is or may be made a
party by reason of his position as a director, officer or other agent of the
Company, and otherwise to the fullest extent permitted under Delaware law and
the Company's By-laws.
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<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Amendment No. 1 to the
Annual Report on Form 10-K for the period ended December 31, 1999 to be signed
on its behalf by the undersigned, thereunto duly authorized, in Redwood City,
State of California, on this 28th day of April 2000.
BroadVision, Inc.
By: /s/ Pehong Chen
-------------------
Pehong Chen
Chairman of the Board, President and
Chief Executive Officer
<TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated and under the power
of attorney granted the person signing on behalf of the named person
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Pehong Chen Chairman of the Board, President and April 28, 2000
---------------
Pehong Chen Chief Executive Officer
(Principal Executive Officer)
/s/ Randall C. Bolten Vice President, Operations, April 28, 2000
--------------------- Chief Financial Officer
Randall C. Bolten (Principal Financial
and Accounting Officer)
/s/ David L. Anderson* Director April 28, 2000
----------------------
David L. Anderson
/s/ Yogen K. Dalal* Director April 28, 2000
----------------------
Yogen K. Dalal
/s/ Koh Boon Hwee* Director April 28, 2000
----------------------
Koh Boon Hwee
/s/ Carl Pascarella* Director April 28, 2000
----------------------
Carl Pascarella
/s/ Todd A. Garrett* Director April 28, 2000
----------------------
Todd A. Garrett
/s/ Klaus Luft* Director April 28, 2000
----------------------
Klaus Luft
<FN>
/s/ Randall C. Bolten
- ----------------------
*Signed under Power of Attorney
</FN>
</TABLE>
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