def14a.htm
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
SCHEDULE 14A
Proxy Statement Pursuant to Section
14(a) of
the Securities Exchange Act of 1934
(Amendment No.
)
Filed by
the Registrant ý
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))
ý Definitive
Proxy Statement
¨ Definitive
Additional Materials
¨ Soliciting
Material Pursuant to §240.14a-12
BROADVISION,
INC.
(Name of
Registrant as Specified In Its Charter)
(Name of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
ý No fee
required.
¨ Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of
each class of securities to which transaction applies:
(2) Aggregate
number of securities to which transaction applies:
(3)
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed
maximum aggregate value of transaction:
¨Fee paid
previously with preliminary materials.
¨ Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount
Previously Paid:
(2) Form,
Schedule or Registration Statement No.:
Persons who are to respond to the
collection of information contained in this form are not required to respond
unless the form displays a currently valid OMB control
number.
March 17,
2009
Dear
Stockholder:
On behalf
of BroadVision, Inc. ("BroadVision"), I cordially invite you to attend the
Annual Meeting of Stockholders, which will begin at 10:00 a.m. local time on
Thursday, April 30, 2009, at our headquarters located at 1600 Seaport Boulevard,
Suite 550, North Building, Redwood City, California. At the meeting,
stockholders will be asked:
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1.
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To
elect the Board of Directors' nominees, Dr. Pehong Chen, James D. Dixon,
Robert Lee and François Stieger, to the Board of Directors to serve for
the ensuing year and until their successors are
elected.
|
|
2.
|
To
ratify the selection of Odenberg, Ullakko, Muranishi & Co. LLP as our
independent registered public accounting firm for the fiscal year ending
December 31, 2009.
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3.
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To
approve the Amended and Restated BroadVision, Inc. 2006 Equity
Incentive Plan to, among other things, (i) provide the Board with
additional flexibility to approve and effect repricings, exchanges and
similar transactions without seeking additional stockholder approval, (ii)
increase the aggregate number of shares authorized for issuance under the
Plan by 174,807 shares and (iii) to include an "evergreen" provision in
the Plan that provides for automatic annual increases in the number of
shares authorized for issuance.
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4.
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To
transact such other business as may properly come before the meeting or
any adjournment or postponement
thereof.
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The
accompanying Notice of Annual Meeting of Stockholders and Proxy Statement
describes these proposals in detail.
Our
directors and officers hope that as many stockholders as possible will be
present at the meeting. Because the vote of each stockholder is important, we
ask that you submit your proxy whether or not you plan to attend the
meeting. This will not limit your right to change your vote prior to or at the
meeting.
We
appreciate your interest in BroadVision. To assist us in preparation for the
meeting, please submit your proxy at your earliest
convenience.
Very
truly yours,
/s/ Pehong
Chen
Dr. PEHONG CHEN
Chairman of the Board, President and
Chief Executive Officer
BROADVISION, INC.
1600
Seaport Boulevard
Suite
550, North Building
Redwood
City, California 94063
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
TO BE HELD ON APRIL 30,
2009
TO THE STOCKHOLDERS OF BROADVISION,
INC.:
NOTICE IS HEREBY
GIVEN that the
Annual Meeting of Stockholders of BROADVISION, INC., a
Delaware corporation, will be held on Thursday, April 30, 2009, at 10:00 a.m.
local time at our headquarters located at 1600 Seaport Boulevard, Suite 550,
North Building, Redwood City, California for the following
purposes:
|
1.
|
To
elect the Board of Directors' nominees, Dr. Pehong Chen, James D. Dixon,
Robert Lee and François Stieger, to the Board of Directors to serve for
the ensuing year and until their successors are
elected
|
|
2.
|
To
ratify the selection of Odenberg, Ullakko, Muranishi & Co. LLP as our
independent registered public accounting firm for the fiscal year ending
December 31, 2009.
|
|
3.
|
To
approve the Amended and Restated BroadVision, Inc. 2006 Equity
Incentive Plan to, among other things, (i) provide the Board with
additional flexibility to approve and effect repricings, exchanges and
similar transactions without seeking additional stockholder approval, (ii)
increase the aggregate number of shares authorized for issuance under the
Plan by 174,807 shares and (iii) to include an "evergreen" provision
in the Plan that provides for automatic annual increases in the number of
shares authorized for
issuance.
|
|
4.
|
To
transact such other business as may properly come before the meeting or
any adjournment or postponement
thereof.
|
The
foregoing items of business are more fully described in the Proxy Statement for
the Annual Meeting.
Our Board
of Directors has fixed the close of business on March 13, 2009 as the record
date for the determination of stockholders entitled to notice of and to vote at
this Annual Meeting and at any adjournment or postponement thereof.
By Order
of the Board of Directors
/s/ Sandra
Adams
SANDRA ADAMS
Secretary and General
Counsel
Redwood
City, California
March 17,
2009
ALL
STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR
NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SUBMIT YOUR PROXY AS PROMPTLY
AS POSSIBLE IN ORDER TO ENSURE YOUR REPRESENTATION AT THE MEETING. EVEN IF
YOU HAVE VOTED BY 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.
BROADVISION, INC.
1600
Seaport Boulevard
Suite
550, North Building
Redwood
City, California 94063
PROXY STATEMENT
FOR ANNUAL MEETING OF
STOCKHOLDERS
March 17,
2009
INFORMATION CONCERNING SOLICITATION
AND VOTING
GENERAL
The Board
of Directors of BroadVision, Inc., a Delaware corporation, is soliciting your
proxy to vote at the Annual Meeting of Stockholders to be held on April 30,
2009, at 10:00 a.m. local time (the "Annual Meeting"), or at any adjournment or
postponement thereof, for the purposes set forth herein. The Annual Meeting will
be held at our headquarters located at 1600 Seaport Boulevard, Suite 550, North
Building, Redwood City, California. Information on how to vote in person at the
Annual Meeting is discussed below.
Pursuant
to rules adopted by the Securities and Exchange Commission (the “SEC”), we have
elected to provide access to our proxy materials over the internet. Accordingly,
we are sending a Notice of Internet Availability of Proxy Materials (the
“Notice”) to our stockholders of record. All stockholders will have
the ability to access the proxy materials on the website referred to in the
Notice or request to receive a printed set of the proxy
materials. Instructions on how to access the proxy materials over the
internet or to request a printed copy may be found in the Notice.
We intend
to mail the Notice on or about March 17, 2009 to all stockholders of record
entitled to vote at the Annual Meeting. We may send you a proxy card, along with
a second Notice, on or after March 27, 2009.
SOLICITATION
We
will bear the entire cost of solicitation of proxies, including preparation of
this proxy statement and mailing of the Notice. Solicitation materials will be
made available 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. We 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 our directors, officers or
other regular employees. No additional compensation will be paid to our
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 March 13, 2009
will be entitled to notice of and to vote at the Annual Meeting. At the close of
business on March 13, 2009, we had outstanding and entitled to
vote 4,377,094 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 Annual
Meeting.
A
quorum of stockholders is necessary to hold a valid meeting. A quorum will be
present if a majority of the outstanding shares are represented by stockholders
present at the meeting in person or by proxy. Votes will be counted by the
inspector of election appointed for the meeting, who will separately count “For”
and (with respect to proposals other than the election of directors) “Against”
votes, abstentions and broker non-votes. (A “broker non-vote” occurs when a
nominee holding shares for a beneficial owner does not vote on a particular
proposal because the nominee does not have discretionary voting power with
respect to that proposal and has not received instructions with respect to that
proposal from the beneficial owner despite voting on at least one other proposal
for which it does have discretionary authority or for which it has received
instructions.) Abstentions and broker non-votes will be counted in determining
whether a quorum is present. Abstentions will be counted towards the vote totals
for all proposals and will have the same effect as “Against” votes. Broker
non-votes have no effect and will not be counted towards the vote totals for any
proposal.
VOTING PROCEDURES
Stockholders
may either vote “For” all the nominees to the Board of Directors or may abstain
from voting for any nominee specified. For each of the other matters to be voted
on, stockholders may vote “For” or “Against” or abstain from
voting.
Stockholder
of Record: Shares Registered in the Stockholder's Name
Stockholders
of record may vote in person at the Annual Meeting or vote by proxy using our online portal, or by a
proxy card that you may request or that we may elect to deliver at a later time.
Whether or not stockholders plan to attend the meeting, we urge stockholders to
vote by proxy to ensure each vote is counted. Stockholders may still attend the
meeting and vote in person even if they have already voted by
proxy.
To vote in person, stockholders of record should attend the
Annual Meeting and will receive a ballot when they
arrive.
Beneficial
Owner: Shares Registered in the Name of Broker or Bank
If
the stockholder is a beneficial owner of shares registered in the name of a
broker, bank or other agent, the stockholder should have received a Notice
containing voting instructions from that organization rather than from
BroadVision. Simply follow the voting instructions in the Notice to ensure that
your vote is counted. To vote in person at the Annual Meeting, the stockholder
must obtain a valid proxy from the broker, bank or other agent. Without a valid proxy from the record holder, a
beneficial owner will not be able to vote in person at the Annual
Meeting. The stockholder should follow the instructions from the
broker, bank or other agent included with these proxy materials, or contact the
broker, bank or other agent to request a proxy form.
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 our Secretary
at our principal executive office, 1600 Seaport Boulevard, Suite 550, North
Building, 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
The
deadline for submitting a stockholder proposal for inclusion in our proxy
statement and form of proxy for our 2010 annual meeting of stockholders pursuant
to Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), is November 17, 2009. Stockholders wishing to submit proposals or
director nominations that are not to be included in such proxy statement and
proxy must do so no later than the close of business on the 90th day nor earlier
than the close of business on the 120th day prior to the first anniversary of
this year’s Annual Meeting. Stockholders are also advised to review our Bylaws,
which contain additional requirements with respect to advance notice of
stockholder proposals and director nominations.
RESULTS
OF VOTING
Preliminary
voting results will be announced at the Annual Meeting. Final voting results
will be published in our quarterly report on Form 10-Q for the second quarter of
2009.
PROPOSAL 1
ELECTION OF
DIRECTORS
There are
four nominees for the eight Board of Director positions presently authorized
pursuant to our Bylaws. Proxies will not be voted for a greater number of
persons than the four named nominees. Each director to be elected will hold
office until the next annual meeting of stockholders and until his successor has
been duly elected and qualified, or until such director’s earlier death,
resignation or removal. Each of the nominees listed below is currently one of
our directors and was previously elected by the stockholders. It is our policy
to invite nominees for directors to attend the annual meeting. None of the
current members of the Board of Directors attended the 2008 annual meeting of
stockholders.
Directors
are elected by a plurality of the votes properly cast in person or by proxy. The
four nominees receiving the highest number of affirmative votes will be elected.
Shares represented by executed proxies will be voted, if authority to do so is
not withheld, for the election of the four nominees named below. If any nominee
becomes unavailable for election as a result of an unexpected occurrence, shares
will be voted for the election of a substitute nominee proposed by our
management. Each person nominated for election has agreed to serve if elected.
Our management has no reason to believe that any nominee will be unable to
serve.
THE BOARD OF DIRECTORS
RECOMMENDS
A VOTE IN FAVOR OF EACH NAMED
NOMINEE.
NOMINEES
The names
of the nominees and a brief biography for each of them are set forth
below:
Name
|
|
Age
|
|
Principal
Occupation/
Position Held With The
Company
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Pehong
Chen
|
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51
|
|
Chairman,
President and Chief Executive Officer
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James
D. Dixon
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|
65
|
|
Formerly
an executive with bankofamerica.com
|
Robert
Lee
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60
|
|
Formerly
an executive with Pacific Bell
|
François
Stieger
|
|
59
|
|
Chief
Executive Officer, Intentional Software International
Sarl
|
Pehong
Chen has served as
our Chairman of the Board, Chief Executive Officer and President since our
incorporation in May 1993. Dr. Chen served as Interim Chief Financial Officer
during the period between William Meyer’s departure in June 2006 and Shin-Yuan
Tzou’s appointment as Chief Financial Officer in January 2008. From
1992 to 1993, Dr. Chen served as the Vice President of Multimedia Technology at
Sybase, Inc., a supplier of client-server software products. Dr. Chen founded
and, from 1989 to 1992, served as President of, Gain Technology, Inc., a
provider of multimedia applications development systems, which was acquired by
Sybase, Inc. Dr. Chen currently serves on the board of directors of SINA.com and
UFIDA Software Co., Ltd. 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.
James D.
Dixon has served as
one of our directors since January 2003. Prior to his retirement from Bank of
America in January 2002, Mr. Dixon served as an executive with
bankofamerica.com. From September 1998 to February 2000, Mr. Dixon was Group
Executive and Chief Information Officer of Bank of America Technology &
Operations. From 1990 to 1998, before the merger of NationsBank Corporation and
BankAmerica Corporation, Mr. Dixon was President of NationsBank Services, Inc.
From 1986 to 1990, he also served as Chief Financial Officer for Citizens and
Southern Bank/Sovran, a predecessor company to NationsBank. Mr. Dixon holds a
B.A. from Florida State University, a J.D. from the University of Florida School
of Law, and he is a graduate of the executive M.B.A. program at Stanford
University. Mr. Dixon also previously served on the board of directors of
CheckFree Corporation, a provider of financial electronic commerce services and
products, and Rare Hospitality International, Inc., a restaurant operator and
franchisor.
Robert Lee
has served as one of our directors since
August 2004. Mr. Lee was a corporate Executive Vice President and President of
Business Communications Services at Pacific Bell, where he established two new
subsidiaries: Pacific Bell Internet Services and Pacific Bell Network
Integration. During his 26 year career at Pacific Bell, Mr. Lee managed groups
in operations, sales and marketing. Mr. Lee served as Executive Vice President
of Marketing and Sales from 1987 to 1992. Mr. Lee serves on the board of
directors of Blue Shield of California, which provides health insurance to
members in California, and Corinthian Colleges, which operates as a
post-secondary education company in North America. Mr. Lee holds a B.S. in
Electrical Engineering from the University of Southern California and an M.B.A.
from the University of California at Berkeley.
François
Stieger has served
as one of our directors since August 2006. Mr. Stieger leads Intentional
Software’s international group as CEO of Intentional Software International
Sarl. He is also the President and a board member of Security Tech SA and a
board member of Lighthouse SA. Immediately prior to joining Intentional Software
International, Mr. Stieger was senior vice president and general manager for
Europe, Middle East and Africa for Verisign, the leading provider of critical
infrastructure security services for the Internet and telecommunication markets.
He held this post since April 2003, and was responsible for Verisign’s business
throughout that region. Prior to joining Verisign, Mr. Stieger was a partner of
Amadeus Capital, a leading European venture capital firm based in London. In
1996, Mr. Stieger established BroadVision’s European operations. Under his
management through mid 2001, these operations grew to more than 400 employees
and US$104 million annual revenues. He was also personally involved in
BroadVision’s very successful initial public offering on NASDAQ in June 1996,
and its public offering on the Neuer Markt in Frankfurt in November 1999. On a
larger scale from 1987-1992, as vice president Mr. Stieger established and
managed operations of Oracle Corporation for southern and central Europe. Mr.
Stieger is a graduate of the University of Strasbourg’s Institute of
Technology.
INFORMATION ABOUT THE BOARD OF
DIRECTORS
Independence of the Board of
Directors
As
required under Nasdaq listing standards, a majority of the members of a listed
company’s board of directors must qualify as “independent,” as affirmatively
determined by the board of directors. The Board consults with our company
counsel to ensure that the Board’s determinations are consistent with all
relevant securities and other laws and regulations regarding the definition of
“independent,” including those set forth in pertinent listing standards of
Nasdaq, in effect from time to time.
Consistent
with these considerations, after review of all relevant identified transactions
or relationships between each director, or any of his family members, and us,
our senior management and our independent registered public accounting firm, the
Board affirmatively has determined that three of our current directors are
independent directors within the meaning of the applicable Nasdaq listing
standards. Dr. Chen, our Chairman, Chief Executive Officer, President and
largest stockholder, is not “independent” within the meaning of the applicable
Nasdaq listing standards.
As
required under applicable Nasdaq listing standards, our independent directors
meet in regularly scheduled executive sessions at which only independent
directors are present, in conjunction with regularly scheduled Board meetings
and otherwise as needed.
Code
of Business Ethics and Conduct
We have
adopted a Code of Business Ethics and Conduct (the “Code of Conduct”) that
applies to all of our directors, officers and employees. The text of the Code of
Conduct is posted on our website at www.broadvision.com. If we make any
substantive amendment to the Code of Conduct or grant any waiver from a
provision of the Code of Conduct to any executive officer or director, we will
promptly disclose the nature of the amendment or waiver on our
website.
Stockholder Communications with the
Board of Directors
Our Board
has adopted a formal process by which stockholders may communicate directly with
the members of the Board, and stockholders are encouraged to do so. Stockholders
interested in communicating with the directors may do so by addressing
correspondence to a particular director, or to the Board generally, in our care
at 1600 Seaport Boulevard, Suite 550, North Building, Redwood City, California
94063. If no particular director is named, letters will be forwarded, depending
on the subject matter, to the Chair of the Audit, Compensation or Nominating
Committee. Our personnel will not screen or edit such communications and will
forward them directly to the intended member of the Board.
BOARD COMMITTEES AND
MEETINGS
During
the fiscal year ended December 31, 2008, the Board met 6 times. During the fiscal year ended December
31, 2008, each Board member attended 75% or more of the aggregate number of
meetings of the Board and of the committees on which he served, held during the
portion of the last fiscal year for which he was a director or committee member,
respectively.
The Board
has an Audit Committee, a Compensation Committee and a Nominating Committee.
Copies of the charters of all three of the Board’s standing committees are
available on our website at www.broadvision.com. Each committee has authority to
obtain advice and assistance from consultants and advisors, as it deems
appropriate, to carry out its responsibilities. The Board has determined that
each member of its committees meets the applicable rules and regulations
regarding “independence” and that each member of its committees is free of any
relationship that would interfere with his individual exercise of independent
judgment with regard to us.
Below is
a description of each of these committees.
The Audit
Committee
The Audit
Committee of the Board of Directors oversees our corporate accounting and
financial reporting process. For this purpose, the Audit Committee performs
several functions. The Audit Committee evaluates the performance of and assesses
the qualifications of the independent auditors; determines and approves the
engagement of the independent auditors; determines whether to retain or
terminate the existing independent auditors or to appoint and engage new
auditors; reviews and approves the retention of the independent auditors to
perform any proposed permissible non-audit services; monitors the rotation of
partners of the auditors on our audit engagement team as required by law;
confers with management and the independent auditors regarding the effectiveness
of internal control over financial reporting; establishes procedures, as
required under applicable law, for the receipt, retention and treatment of
complaints received by us regarding accounting, internal accounting controls or
auditing matters and the confidential and anonymous submission by employees of
concerns regarding questionable accounting or auditing matters; reviews the
financial statements to be included in our Annual Report on Form 10-K; and
discusses with management and the independent auditors the results of the annual
audit and the results of our quarterly financial statements.
The Audit
Committee is presently composed of three non-employee directors: Messrs. Dixon
(Chairman), Lee and Stieger. The Board has determined that all members of our
Audit Committee are independent (as independence is currently defined in Rule
4350(d)(2)(A) of the Nasdaq listing standards). The Board has determined that
Mr. Dixon qualifies as an “audit committee financial expert,” as defined in
applicable Securities and Exchange Commission (“SEC”) rules. The Board made a
qualitative assessment of Mr. Dixon’s level of knowledge and experience based on
a number of factors, including his formal education and experience as a chief
financial officer for Citizens and Southern Bank/Sovran, a predecessor company
to NationsBank.
The Audit
Committee is also vested with oversight of corporate governance matters and, in
that regard, makes determinations as to all aspects of our corporate governance
functions on behalf of the Board and makes recommendations to the Board
regarding corporate governance issues. The Audit Committee is responsible for
periodically reviewing and assessing our governance principles to determine
their adherence to the Code of Conduct, and recommending any changes deemed
appropriate to the Board for its consideration.
In 2008,
the Audit Committee met 4 times. See
“Report of the Audit Committee of the Board of Directors” below.
The Compensation
Committee
The
Compensation Committee of the Board of Directors reviews and approves our
overall compensation strategy and policies. The Compensation Committee reviews
and approves corporate performance goals and objectives relevant to the
compensation of our executive officers and other senior management; reviews and
approves the compensation and other terms of employment of our Chief Executive
Officer; reviews and approves the compensation and other terms of employment of
the other executive officers; and administers our stock option and purchase
plans, pension and profit sharing plans, stock bonus plans, deferred
compensation plans and other similar programs. We also have a Non-Officer Option
Committee, established in May 1997, which has the power to award stock options
to non-officer employees and consultants. The Compensation Committee is
presently composed of two non-employee directors: Messrs. Dixon and Lee
(Chairman). All members of our Compensation Committee are independent (as
independence is currently defined in Rule 4200(a)(15) of the Nasdaq listing
standards). The sole member of the Non-Officer Option Committee is Dr. Chen. In
2008, the Compensation Committee met 4
times.
The
Nominating Committee
The
Nominating Committee makes determinations as to the individuals who are to be
nominated for membership to the Board. The Nominating Committee has a long
standing practice of considering any qualified director candidates that are
recommended by our stockholders. Stockholders who wish to recommend a director
candidate for consideration by the Nominating Committee may do so in writing to
the Chairman of the Nominating Committee at the following address: BroadVision,
Inc., 1600 Seaport Boulevard, Suite 550, North Building, Redwood City,
California 94063.
If a
stockholder wishes the Nominating Committee to consider a director candidate for
nomination at our next annual meeting, then our Bylaws require that stockholder
to send written notice of the recommendation no sooner than 120 days and no
later than 90 days prior to the first anniversary of the preceding year’s annual
meeting, which notice is otherwise in accordance with the requirements for
stockholder nominations described in our Bylaws. Submissions must include the
candidate’s name and sufficient biographical information concerning the
candidate, including age, five-year employment history with employer names and a
description of the employers’ businesses, whether such candidate can read and
understand basic financial statements, and board memberships, if any. The
submission must be accompanied by a written consent of the individual to stand
for election if nominated by the Board of Directors and to serve if elected by
the stockholders. The Nominating Committee is presently composed of two
non-employee directors: Messrs. Lee (Chairman) and Stieger. All members of our
Nominating Committee are independent (as independence is currently defined in
Rule 4200(a)(15) of the Nasdaq listing requirements). In 2008, the Nominating
Committee met once.
REPORT OF THE AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS*
The Audit
Committee has reviewed and discussed with management the audited consolidated
financial statements of the Company for the year ended December 31, 2008
(the “Audited Financial Statements”) and management's assessment of the
effectiveness of the Company's internal control over financial reporting.
Management has the primary responsibility for the financial statements and the
internal control over financial reporting.
In this
context, the Audit Committee has reviewed and discussed with management and
Odenberg, Ullakko, Muranishi & Co. LLP (“OUM”), the independent registered
public accounting firm, the Audited Financial Statements and the internal
control over financial reporting. The Audit Committee has discussed with OUM the
matters required to be discussed by Statement on Auditing Standards No. 114 (The
Auditors Communication with Those Charged with Governance), as adopted by the
Public Company Accounting Oversight Board (“PCAOB”) in Rule 3200T. In addition,
the Audit Committee has received from OUM the written disclosures and the letter
required by applicable requirements of the PCAOB regarding OUM’s communications
with the audit committee concerning independence, and has discussed with them
their independence from the Company and its management. The Audit Committee
considered whether the rendering of non-audit services by OUM to the Company is
compatible with maintaining the independence of OUM from the
Company.
Following
the foregoing review and discussions, the Audit Committee recommended to the
Board of Directors that the Audited Financial Statements be included in the
Company's Annual Report on Form 10-K for the year ended December 31,
2008 for filing with the SEC.
AUDIT COMMITTEE
James D.
Dixon, Chairman
Robert
Lee
François
Stieger
* The material in this report is not “soliciting
material,” is not deemed “filed” with the SEC, and is not incorporated by
reference into any filing of the Company under the Securities Act of 1933, as
amended (the “Securities Act”), or the Exchange Act.
PROPOSAL 2
RATIFICATION OF SELECTION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit
Committee has selected Odenberg, Ullakko, Muranishi & Co. LLP (“OUM”) as our
independent registered for the fiscal year ending December 31, 2009.
The Board of Directors has directed that management submit the selection of our
independent registered public accounting firm for ratification by the
stockholders at the Annual Meeting. OUM has audited our financial statements
beginning with the fiscal year ended December 31, 2006. Representatives of OUM
are expected to be present at the Annual Meeting, will have an opportunity to
make a statement if they so desire, and will be available to respond to
appropriate questions.
Stockholder
ratification of the selection of OUM as our independent registered public
accounting firm is not required by our Bylaws or otherwise; however, the Board
is submitting the selection of OUM to the stockholders for ratification as a
matter of good corporate practice. If the stockholders fail to ratify the
selection, the Audit Committee will reconsider whether or not to retain that
firm. Even if the selection is ratified, the Audit Committee in its discretion
may direct the appointment of a different independent registered public
accounting firm at any time during the year if it determines that such a change
would be in our best interests and those of our stockholders.
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 Annual Meeting will be required
to ratify the selection of OUM. 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.
PRINCIPAL ACCOUNTANT FEES AND
SERVICES
The
following presents aggregate fees billed to us by OUM, our principal accountant
for the years ended December 31, 2008, 2007 and 2006. All fees described
were pre-approved by the Audit Committee.
Audit
Fees. Audit
fees billed were $453,182 and $556,175 for the years ended December 31, 2008 and
2007, respectively. The fees were for professional services rendered for the
integrated audits of our consolidated financial statements (which also include
the audits of the effectiveness of our internal control over financial
reporting), reviews of the financial statements included in our quarterly
reports, consultations on matters that arose during our audit and reviews of SEC
registration statements.
Audit-Related
Fees. No audit-related fees were billed in the years ended December 31,
2008 and December 31, 2007.
Tax Fees.
No tax fees were billed for the years ended December 31, 2008 and 2007,
respectively.
All Other
Fees. There were no other fees billed in the years ended December 31,
2008 and 2007, respectively.
The Audit
Committee has determined that the rendering of certain services other than audit
services by OUM is compatible with maintaining the principal accountant’s
independence.
PRE-APPROVAL POLICIES AND
PROCEDURES
The Audit
Committee has adopted a policy and procedures for the pre-approval of audit and
non-audit services rendered by our independent registered public accounting
firm. The policy generally pre-approves specified services in the defined
categories of audit services, audit-related services, and tax services up to
specified amounts. Pre-approval may also be given as part of the Audit
Committee’s approval of the scope of the engagement of our independent
registered public accounting firm or on an individual explicit case-by-case
basis before the independent registered public accounting firm is engaged to
provide each service. The pre-approval of services may be delegated to one or
more of the Audit Committee’s members, but the decision must be reported to the
full Audit Committee at its next scheduled meeting.
THE BOARD OF DIRECTORS
RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL
2.
PROPOSAL 3
APPROVAL OF THE AMENDED AND RESTATED
2006 EQUITY INCENTIVE PLAN
In 2006,
the Board adopted, and our stockholders subsequently approved, the BroadVision,
Inc. 2006 Equity Incentive Plan (the “Incentive Plan”). In
2008, the Incentive Plan was subsequently amended by the Board and approved by
our stockholders on June 5, 2008. As of March 17, 2009 a total of 434,807 shares of our Common Stock have been
reserved for issuance under the Incentive Plan including the 174,807 shares
that are the subject of this proposal.
As of
February 24, 2009, stock awards (net of
canceled or expired stock awards) covering an aggregate of 124,027 shares of our Common Stock had been
granted under the Incentive Plan, and 133,023 remained available for future grant under
the Incentive Plan. During the 2008 fiscal year, under the Incentive Plan, we
granted options to purchase 6,000 shares to Shin-Yuan Tzou, our Chief Financial
Officer. During the same period we granted to all employees and directors as a
group options to purchase 97,960 shares at
exercise prices of $15.75 to $55.25 per share and restricted stock awards to
receive up to 2,018 shares.
On January 21, 2009 , the Board adopted the
Amended and Restated BroadVision, Inc. 2006 Equity Incentive Plan (the “Amended
and Restated Plan”). Subject to shareholder approval, the Amended and Restated
Plan is adopted for the following purposes:
1. Evergreen
Provision. Our Board has determined that it would be in the
best interest of our Company and our stockholders to amend the Incentive Plan to
provide for an automatic annual increase in the number of shares available for
grant under the Amended and Restated Plan (the “evergreen
provision”). The evergreen provision provides that, on January 1 of
each of the next ten years, the number of shares reserved for issuance will
automatically increase by the lesser of (i) four percent of the total number of
outstanding shares of our Common Stock immediately prior to the increase and
(ii) a number of shares such that, following the increase, the total number of
shares that have been reserved for issuance under the Plan equals
twenty-five percent of the total number of outstanding shares of our
Common Stock and (iii) a number of shares such that, following the increase, the
total number of shares available for future issuance under the Plan and not
subject to outstanding stock awards equals ten percent (10%) of the total number
of shares of Common Stock outstanding on December 31st of the preceding calendar
year. The evergreen provision ensures our ability to issue
equity compensation to our employees and executive officers who contribute
significantly to our success by giving us the flexibility each year to respond
to the changing market environment in order to appropriately direct their
efforts to focus on maximizing the value of our common stock.
2. Authority to adopt an
Option Exchange Program. Our Board has determined that
it would be in the best interests of our Company and our stockholders to amend
the Incentive Plan to give the Board authority to institute a stock option
exchange program without obtaining further stockholder approval. Due to recent
volatility in our stock price and the current economic downturn and tightening
of the credit markets, many of our employees and executive officers hold options
with exercise prices significantly higher than the current market price of our
common stock (“underwater options”). Our stock options are designed
to motivate, reward and retain employees and executive officers key to our
continued success; however due to their underwater nature, these outstanding
stock options may not provide this meaningful retention or incentive
value. An option exchange program may allow us to offer a more
meaningful incentive to our employees and align their interests more directly
with those of our stockholders. We believe that in order to maintain competitive
employee compensation and incentive programs we need to have the flexibility to
reduce the price of options should, in the future, our Board determine that an
option exchange is in the best interests of our Company and our
stockholders.
3. Other Changes.
The Amended and Restated Plan contains other necessary changes that the
Board has determined are in the best interests of our Company and our
stockholders. These changes to the Incentive Plan bring the plan into
compliance with applicable laws and regulations and afford us greater
flexibility in providing employees with stock incentives and ensure that we can
continue to provide such incentives at levels determined appropriate by the
Board.
The
following summary description of the Amended and Restated Plan is qualified in
its entirety by reference to the full text of the Amended and Restated Plan that
is attached as Appendix to the proxy statement filed via EDGAR with the
SEC, including all changes that this proposal would effect if approved by our
stockholders at the annual meeting.
Stockholders
are requested in this Proposal 3 to approve
the Amended and Restated Plan. 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 Amended and Restated
Plan. 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
3.
The
essential features of the Amended and Restated Plan are outlined
below:
General
The
Amended and Restated Plan provides for the grant of incentive stock options,
nonstatutory stock options, restricted stock awards, restricted stock unit
awards, stock appreciation rights, performance stock awards, performance cash
awards and other forms of equity compensation (collectively, “awards”).
Incentive stock options granted under the Amended and Restated 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 Amended and Restated Plan are not intended to qualify
as incentive stock options under the Code. See “Federal Income Tax Information”
for a discussion of the tax treatment of awards.
Purpose
We
adopted the Amended and Restated Plan to provide a means to secure and retain
the services of the employees, directors and consultants of BroadVision and our
affiliates, to provide incentives for such individuals to exert maximum efforts
for the success of BroadVision and our affiliates, and to provide a means by
which such eligible individuals may be given an opportunity to benefit from
increases in the value of our Common Stock through the grant of
awards.
Administration
The
Board administers the Amended and Restated Plan. Subject to the provisions of
the Amended and Restated Plan, the Board has the power to construe and interpret
the Amended and Restated Plan, to determine the persons to whom and the dates on
which awards will be granted, the number of shares of Common Stock subject to
each award, the time or times during the term of each award within which all or
a portion of such award may be exercised, the exercise price, or strike price of
each award, the type of consideration permitted to exercise or purchase each
award and other terms of the award. Additionally under the Amended
and Restated Plan, our Board has the authority to determine the fair market
value applicable to a stock award and to amend the Plan to bring any stock award
into compliance with section 409A of the Code and other laws, subject to
stockholder approval as required by applicable law.
The
Board has the power to delegate some or all of the administration of the Amended
and Restated Plan to a committee or committees. The Board has delegated
administration of the Amended and Restated Plan to the Compensation Committee of
the Board and to the Non-Officer Option Committee. As used herein with respect
to the Amended and Restated Plan, the “Board” refers to any committee the Board
appoints or, if applicable, any subcommittee, as well as to the Board
itself.
Repricing
The Amended and Restated Plan gives the Board the
authority, with the consent of any adversely affected participant, to reduce the
exercise price of outstanding options or stock appreciation rights under the
plan, cancel any such outstanding awards and grant in substitution a new award,
cash or other valuable consideration, or take any other action that is treated
as a repricing under generally accepted accounting principles. By
contrast, the Incentive Plan gave the Board similar authority but required
stockholder approval within 12 months prior to such event.
Stock
Subject to the Amended and Restated Plan
Including
the shares covered by the proposal, an aggregate of 434,807 shares of
Common Stock are reserved for issuance under the Amended and Restated
Plan. In
addition, if this Proposal 3 is approved, an “evergreen provision” shall be
included in the share reserve providing that the number of shares of Common
Stock available for issuance under the Amended and Restated Plan shall
automatically increase upon January 1st of each
year for a period of ten years in an amount equal to four percent of the total
number of shares of our common stock outstanding on December 31st of the
preceding calendar year. However, the maximum aggregate number of
common shares that have been reserved for issuance under the Amended and
Restated Plan shall not exceed twenty-five percent of the total number of shares
of our Common Stock outstanding immediately prior to any such increase, and the
maximum aggregate number of shares available for future issuance under the
Amended and Restated Plan and not subject to outstanding stock awards shall not
exceed ten percent of the total number of shares of Common Stock outstanding
immediately prior to any such increase. In addition, our Board may,
in its sole discretion, reduce or eliminate the share increase for each
year.
Shares
may be issued in connection with a merger or acquisition as permitted by the
rules of the applicable national securities exchange, and such issuance shall
not reduce the number of shares available for issuance under the Amended and
Restated Plan. If an award granted under the Amended and Restated Plan expires
or otherwise terminates without being exercised in full, or if any shares of
Common Stock issued pursuant to an award are forfeited to or repurchased by us,
including, but not limited to, any repurchase or forfeiture caused by the
failure to meet a contingency or condition required for the vesting of such
shares, then the shares of Common Stock not issued under such award, or
forfeited to or repurchased by us, shall revert to and again become available
for issuance under the Amended and Restated Plan. If any shares subject to an
award are not delivered to a participant because such shares are withheld for
the payment of taxes or the award is exercised through a reduction of shares
subject to the stock award (i.e .,
“net exercised”), the number of shares that are not delivered shall remain
available for issuance under the Amended and Restated Plan. If the exercise
price of any stock award is satisfied by tendering shares of Common Stock held
by the participant, then the number of shares so tendered shall remain available
for issuance under the Amended and Restated Plan.
The
aggregate maximum number of shares of Common Stock that may be issued under the
Amended and Restated Plan pursuant to the exercise of incentive stock options
is 1,300,000 shares.
Eligibility
Incentive
stock options may be granted under the Amended and Restated Plan only to
employees (including officers) of BroadVision and our affiliates. Employees
(including officers) and consultants of both BroadVision and our affiliates, as
well as BroadVision directors, are eligible to receive all other types of awards
under the Amended and Restated Plan. Non-employee directors of
BroadVision’s affiliates are not eligible to receive awards under the Amended
and Restated Plan. All of the employees and consultants of BroadVision and our
affiliates, as well as BroadVision non-employee directors, are eligible to
participate in the Amended and Restated Plan. However, the Amended
and Restated Plan additionally provides that nonstatutory stock options and
stock appreciation rights may not be granted to any employees, directors or
consultants who provide services only to a parent of BroadVision, in accordance
with Rule 405 of the Securities Act, unless such awards comply with the
distribution requirements of section 409A of the Code.
No
incentive stock option may be granted under the Amended and Restated 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 BroadVision or
any of our affiliates, unless the 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, the aggregate fair market value, determined at the time of grant, of
the shares of Common Stock with respect to which incentive stock options are
exercisable for the first time by a participant during any calendar year (under
the Amended and Restated Plan and all other such plans of BroadVision and our
affiliates) may not exceed $100,000.
Under
the Amended and Restated Plan, no employee may be granted options, stock
appreciation rights or other stock awards covering more than 434,807 shares
of Common Stock during any calendar year (“Section 162(m)
Limitation”).
Terms of Options
Options
may be granted under the Amended and Restated Plan pursuant to stock option
agreements. The following is a description of the permissible terms of options
under the Amended and Restated Plan. Individual option agreements may be more
restrictive as to any or all of the permissible terms described
below.
Exercise Price. The exercise
price of incentive stock options may not be less than 100% of the fair market
value of the stock subject to the option on the date of the 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 may not be less than 100% of
the fair market value of the stock on the date of grant. As of March 13, 2009,
the closing price of BroadVision’s Common Stock as reported on the Nasdaq Global Market was $10.50 per
share.
Consideration. The exercise
price of options granted under the Amended and Restated Plan must be paid, to
the extent permitted by applicable law and at the discretion of the Board, (i)
by cash, check, bank draft or money order, (ii) pursuant to a broker-assisted
cashless exercise, (iii) by delivery of other BroadVision Common Stock, (iv) if
the option is a nonstatutory stock option, pursuant to a net exercise
arrangement, or (iv) in any other form of legal consideration acceptable to the
Board.
Vesting. Options granted
under the Amended and Restated Plan may become exercisable in cumulative
increments, or “vest,” as determined by the Board. Vesting typically will occur
during the optionholder’s continued service with BroadVision or an affiliate,
whether such service is performed in the capacity of an employee, consultant or
director (collectively, “service”) and regardless of any change in the capacity
of the service performed. Shares covered by different options granted under the
Amended and Restated Plan may be subject to different vesting terms. The Board
has the authority to accelerate the time during which an option may vest or be
exercised. In addition, options granted under the Amended and Restated Plan may
permit exercise prior to vesting, but in such event the participant may be
required to enter into an early exercise stock purchase agreement that allows us
to repurchase unvested shares if the participant’s service terminate before
vesting.
Tax Withholding. Unless
prohibited by the terms of the option agreement, BroadVision may, in its sole
discretion satisfy any federal, state or local tax withholding obligation
relating to the exercise of such option by a cash payment upon exercise, by
withholding a portion of the stock otherwise issuable to the participant or any
other amounts otherwise payable to the participant, by any other method set
forth in the option agreement, or by a combination of these means.
Term. The maximum term of
options granted under the Amended and Restated Plan is 10 years, except that in
certain cases (see “Eligibility”) the maximum term is five years.
Termination of Service.
Options granted under the Amended and Restated Plan generally terminate three
months after termination of the participant’s service unless (i) such
termination is for cause (as defined in the Amended and Restated Plan), in which
case the option will terminate upon the date on which the event giving rise to
the termination occurred; (ii) termination is due to the participant’s
disability, in which case the option may be exercised (to the extent the option
was exercisable at the time of the termination of service) at any time within 12
months following termination; (iii) the participant dies before the
participant’s service has terminated, or within generally three months after
termination of service, in which case the option may be exercised (to the extent
the option was exercisable at the time of the participant’s death) within 18
months following the participant’s death by the person or persons to whom the
rights to such option have passed; or (iv) the option or any other
agreement between the participant and BroadVision by its terms specifically
provides otherwise. The option term may be extended (except if the participant
is terminated for cause) in the event that exercise of the option following
termination of service is prohibited by applicable securities laws or by our
insider trading policy. In no event, however, may an option be exercised beyond
the expiration of its term.
Restrictions on Transfer.
Unless provided otherwise by the Board, a participant in the Amended and
Restated Plan may not transfer an option other than by will or by the laws of
descent and distribution or pursuant to a domestic relations order. During the
lifetime of the participant, only the participant (or the transferee pursuant to
a domestic relations order) may exercise an option. A participant may also
designate a beneficiary who may exercise an option following the participant’s
death. Shares subject to repurchase by BroadVision pursuant to an early exercise
arrangement may be subject to restrictions on transfer that the Board deems
appropriate.
Terms
of Restricted Stock Awards
Restricted
stock awards may be granted under the Amended and Restated Plan pursuant to
restricted stock award agreements.
Consideration. A restricted
stock award may be awarded in consideration for cash, check, bank draft or money
order payable to us, past or future services actually rendered to BroadVision or
its affiliates, or any other form of legal consideration that may be acceptable
to the Board.
Vesting. Shares of stock
acquired under a restricted stock award may, but need not be, subject to
forfeiture or a repurchase option in favor of BroadVision in accordance with a
vesting schedule as determined by the Board. The Board has the authority to
accelerate the vesting of stock acquired pursuant to a restricted stock
award.
Termination of Service. Upon
termination of a participant’s service, we may repurchase or otherwise reacquire
any forfeited shares of stock that have not vested as of such termination under
the terms of the applicable restricted stock award agreement.
Restrictions on
Transfer. Rights to acquire shares under a
restricted stock award may be transferred only upon such terms and conditions as
determined by the Board.
Terms
of Restricted Stock Unit Awards
Restricted
stock unit awards may be granted under the Amended and Restated Plan pursuant to
restricted stock unit award agreements.
Consideration. The purchase
price, if any, for restricted stock unit awards may be paid in any form of legal
consideration acceptable to the Board.
Settlement of
Awards. A restricted stock unit award may be settled by the
delivery of shares of our Common Stock, in cash, or by any combination of these
means as determined by the Board.
Vesting. Restricted stock
unit awards vest at the rate specified in the restricted stock unit award
agreement as determined by the Board. However, at the time of grant, the Board
may impose additional restrictions or conditions that delay the delivery of
stock or cash subject to the restricted stock unit award after
vesting.
Dividend Equivalents.
Dividend equivalent rights may be credited with respect to shares covered by a
restricted stock unit award. However, we do not anticipate paying cash dividends
on our Common Stock for the foreseeable future.
Termination of Service.
Except as otherwise provided in the applicable award agreement, restricted stock
units that have not vested will be forfeited upon the participant’s termination
of service.
Stock
Appreciation Rights
Stock
appreciation rights may be granted under the Amended and Restated Plan pursuant
to stock appreciation rights agreements.
Exercise. Each
stock appreciation right is denominated in shares of Common Stock equivalents.
Upon exercise of a stock appreciation right, we will pay the participant an
amount equal to the excess of (i) the aggregate fair market value of our Common
Stock on the date of exercise, over (ii) the strike price determined by the
Board on the date of grant.
Settlement of Awards. The
appreciation distribution upon exercise of a stock appreciation right may be
paid in cash, shares of our Common Stock, or any other form of consideration
determined by the Board.
Vesting. Stock appreciation
rights vest and become exercisable at the rate specified in the stock
appreciation right agreement as determined by the Board.
Termination of Service. Upon
termination of a participant’s service (other than for cause), the participant
generally may exercise any vested stock appreciation right for three months (or
such longer or shorter period specified in the stock appreciation right
agreement) after the date such service relationship ends. However, in no event
may a stock appreciation right be exercised beyond the expiration of its
term.
Terms
of Other Equity Awards
The Board
may grant other equity awards that are valued in whole or in part by reference
to our Common Stock. Subject to the provisions of the Amended and Restated Plan,
the Board has the authority to determine the persons to whom and the dates on
which such other equity awards will be granted, the number of shares of Common
Stock (or cash equivalents) to be subject to each award, and other terms and
conditions of such awards.
Performance-Based
Awards
The
Amended and Restated Plan provides for the grant of two types of performance
awards: performance stock awards and performance cash awards. Under
the Amended and Restated Plan, an award may vest or be exercised contingent upon
the attainment during a certain period of time of certain performance goals. All
employees of BroadVision and our affiliates, as well as our directors, are
eligible to receive performance-based awards under the Amended and Restated
Plan. The length of any performance period, the performance goals to be achieved
during the performance period, and the measure of whether and to what degree
such performance goals have been attained shall be determined by the
Compensation Committee. The maximum amount to be received by any individual in
any calendar year attributable to performance-based stock awards may not
exceed 434,807 shares of our Common Stock. The maximum amount to be
received by any individual in any calendar year attributable to
performance-based cash awards may not exceed $5,000,000.
In
granting a performance-based award, the Compensation Committee will set a period
of time (a “performance period”) over which the attainment of one or more goals
(“performance goals”) will be measured for the purpose of determining whether
the award recipient has a vested right in or to such award. Within the time
period prescribed by Section 162(m) of the Code, at a time when the achievement
of the performance goals remains substantially uncertain (typically before the
90th day of a performance period or the date on which twenty-five percent of the
performance period has elapsed), the Compensation Committee will establish the
performance goals, based upon one or more pre-established criteria (“performance
criteria”) enumerated in the Amended and Restated Plan and described below. As
soon as administratively practicable following the end of the performance
period, the Compensation Committee will certify (in writing) whether the
performance goals have been satisfied.
Performance
goals under the Amended and Restated Plan are determined by the Board, based on
one or more of the following performance criteria: (i) earnings (including
earnings per share and net earnings); (ii) earnings before interest, taxes and
depreciation; (iii) earnings before interest, taxes, depreciation and
amortization; (iv) total stockholder return; (v) return on equity or average
stockholder’s equity; (vi) return on assets, investment, or capital employed;
(vii) stock price; (viii) margin (including gross margin); (ix) income (before
or after taxes); (x) operating income; (xi) operating income after taxes; (xii)
pre-tax profit; (xiii) operating cash flow; (xiv) sales or revenue targets; (xv)
increases in revenue or product revenue; (xvi) expenses and cost reduction
goals; (xvii) improvement in or attainment of working capital levels; (xiii)
economic value added (or an equivalent metric); (xix) market share; (xx) cash
flow; (xxi) cash flow per share; (xxii) share price performance; (xxiii) debt
reduction; (xxiv) implementation or completion of projects or processes; (xxv)
customer satisfaction; (xxvi) stockholders’ equity; (xxvii) capital
expenditures; (xxiii) debt levels; (xxix) operating profit or net operating
profit; (xxx) workforce diversity; (xxxi) growth of net income or operating
income; (xxxii) billings; and (xxxiii) to the extent that an Award is not
intended to comply with Section 162(m) of the Code, other measures of
performance selected by the Board.
The Board
is authorized to determine whether, when calculating the attainment of
performance goals for a performance period as follows: (i) to exclude
restructuring and/or other nonrecurring charges; (ii) to exclude exchange rate
effects, as applicable, for non-U.S. dollar denominated Performance Goals; (iii)
to exclude the effects of changes to generally accepted accounting principles;
(iv) to exclude the effects of any statutory adjustments to corporate tax rates;
and (v) to exclude the effects of any “extraordinary items” as determined under
generally accepted accounting principles. In addition, the Board retains the
discretion to reduce or eliminate the compensation or economic benefit due upon
attainment of performance goals.
Compensation
attributable to performance-based awards under the Amended and Restated Plan
will qualify as performance-based compensation, provided that: (i) the award is
granted by a compensation committee comprised solely of “outside directors,”
(ii) the award is granted (or exercisable) only upon the achievement of an
objective performance goal established in writing by the compensation committee
while the outcome is substantially uncertain, and (iii) the compensation
committee certifies in writing prior to the granting (or exercisability) of the
award that the performance goal has been satisfied.
Adjustment
Provisions
If any
change is made to the outstanding shares of our Common Stock without our receipt
of consideration (whether through merger, consolidation, reorganization, stock
dividend, or stock split or other specified change in the capital structure of
BroadVision), appropriate adjustments will be made to: (i) the maximum number
and/or class of securities issuable under the Amended and Restated Plan, (ii)
the maximum number and/or class of securities that may be issued pursuant to
incentive stock options, (ii) the maximum number and/or class of securities for
which any one person may be granted options and/or stock appreciation rights or
performance-based awards per calendar year pursuant to the Section 162(m)
Limitation, and (iii) the number and/or class of securities and the price per
share in effect under each outstanding award under the Amended and Restated
Plan.
Effect
of Certain Corporate Events
Under the
Amended and Restated Plan, unless otherwise provided in a written agreement
between BroadVision or any affiliate and the holder of an award, in the event of
a corporate transaction (as defined in the Amended and Restated Plan and
described below), all outstanding stock awards under the Amended and Restated
Plan may be assumed, continued or substituted for by any surviving or acquiring
entity (or its parent company). If the surviving or acquiring entity (or its
parent company) elects not to assume, continue or substitute for such stock
awards, then (i) with respect to any such stock awards that are held by
individuals whose continuous service with BroadVision or our affiliates has not
terminated prior to the effective date of the corporate transaction, the vesting
and exercisability provisions of such stock awards may, in the Board’s
discretion be accelerated in full and such awards will terminate if not
exercised prior to the effective date of the corporate transaction, and (ii)
with respect to any stock awards that are held by other individuals, the vesting
and exercisability provisions of such stock awards will not be accelerated and
such awards will terminate if not exercised prior to the effective date of the
corporate transaction (except that any reacquisition or repurchase rights held
by us with respect to such stock awards shall not terminate and may continued to
be exercised notwithstanding the corporate transaction). In the event a stock
award will terminate if not exercised, the Board may provide, in its sole
discretion, that the holder of such stock award may not exercise such stock
award but will receive a payment equal to the excess of the value of the
property the holder would have received upon exercise over any exercise
price.
For
purposes of the Amended and Restated Plan, a corporate transaction will be
deemed to occur in the event of (i) the consummation of a sale or other
disposition of all or substantially all of the consolidated assets of
BroadVision and our subsidiaries, (ii) the consummation of a sale of at least
90% of the outstanding securities of BroadVision, (iii) the consummation of a
merger or consolidation in which BroadVision is not the surviving corporation,
or (iv) the consummation of a merger or consolidation in which BroadVision is
the surviving corporation but shares of our outstanding Common Stock are
converted into other property by virtue of the transaction.
A stock
award may be subject to additional acceleration of vesting and exercisability
upon or after the occurrence of certain specified change in control transactions
(as defined in the Amended and Restated Plan), as may be provided in the
agreement for such award or as may be provided in any other written agreement
between BroadVision or an affiliate and the participant, but in the absence of
such provision, no such acceleration shall occur.
The
acceleration of vesting of an award in the event of a corporate transaction or a
change in control event under the Amended and Restated Plan may be viewed as an
anti-takeover provision, which may have the effect of discouraging a proposal to
acquire or otherwise obtain control of BroadVision.
Duration,
Amendment and Termination
The Board
may suspend or terminate the Amended and Restated Plan without stockholder
approval or ratification at any time. The Amended and Restated Plan shall
continue until such time as it is suspended or terminated by the Board; however
incentive stock options may not be granted after the tenth anniversary of the
date the Amended and Restated Plan was
first adopted by the Board.
The Board
may amend or modify the Amended and Restated Plan at any time. However, no
amendment shall be effective unless approved by our stockholders to the extent
stockholder approval is necessary to satisfy applicable law or applicable
exchange listing requirements.
The Board
also may submit any other amendment to the Amended and Restated Plan for
stockholder approval, including, but not limited to, amendments intended to
satisfy the requirements relating to incentive stock options and certain
nonqualified deferred compensation under Section 409A of the Code and Section
162(m) of the Code regarding the exclusion of performance-based compensation
from the limitation on the deductibility of compensation paid to certain
employees.
Federal
Income Tax Information
The
following is a summary of the principal United States federal income tax
consequences to employees and BroadVision with respect to participation in the
Amended and Restated Plan. This summary is not intended to be exhaustive, and
does not discuss the income tax laws of any city, state or foreign jurisdiction
in which a participant may reside.
Incentive Stock Options.
Incentive stock options granted under the Amended and Restated 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 participant or BroadVision by reason of the grant or
exercise of an incentive stock option. However, the exercise of an incentive
stock option may increase the participant’s alternative minimum tax liability,
if any.
If a
participant holds stock acquired through exercise of an incentive stock option
for more than two years from the date on which the option was granted and more
than one year after the date the option was exercised for those shares, any gain
or loss on a disposition of those shares (a “qualifying disposition”) will be a
long-term capital gain or loss. Upon such a qualifying disposition, we will not
be entitled to any income tax deduction.
Generally,
if the participant disposes of the stock before the expiration of either of
these holding periods (a “disqualifying disposition”), then at the time of
disposition the participant will realize taxable ordinary income equal to the
lesser of (i) the excess of the stock’s fair market value on the date of
exercise over the exercise price, or (ii) the participant’s actual gain, if any,
on the purchase and sale. The participant’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 whether the stock was held for more than
one year.
To the
extent the participant recognizes ordinary income by reason of a disqualifying
disposition, generally we will be entitled (subject to the requirement of
reasonableness, the provisions of Section 162(m) of the Code, and the
satisfaction of a tax reporting obligation) to a corresponding income tax
deduction in the tax year in which the disqualifying disposition
occurs.
Nonstatutory Stock Options.
No taxable income is recognized by a participant upon the grant of a
nonstatutory stock option. Upon exercise of a nonstatutory stock option, the
participant will recognize ordinary income equal to the excess, if any, of the
fair market value of the purchased shares on the exercise date over the exercise
price paid for those shares. Generally, we will be entitled (subject to the
requirement of reasonableness, the provisions of Section 162(m) of the Code, and
the satisfaction of a tax reporting obligation) to a corresponding income tax
deduction in the tax year in which such ordinary income is recognized by the
participant.
Upon
disposition of the stock, the participant 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
whether the stock was held for more than one year.
Restricted Stock Awards. Upon
receipt of a restricted stock award, the participant will recognize ordinary
income equal to the excess, if any, of the fair market value of the shares on
the date of issuance over the purchase price, if any, paid for those shares. We
will be entitled (subject to the requirement of reasonableness, the provisions
of Section 162(m) of the Code, and the satisfaction of a tax reporting
obligation) to a corresponding income tax deduction in the tax year in which
such ordinary income is recognized by the participant.
However,
if the shares issued upon the grant of a restricted stock award are unvested and
subject to reacquisition or repurchase by BroadVision in the event of the
participant’s termination of service prior to vesting in those shares, the
participant will not recognize any taxable income at the time of issuance, but
will have to report as ordinary income, as and when our reacquisition or
repurchase right lapses, an amount equal to the excess of (i) the fair market
value of the shares on the date the reacquisition or repurchase right lapses,
over (ii) the purchase price, if any, paid for the shares. The participant may,
however, elect under Section 83(b) of the Code to include as ordinary income in
the year of issuance an amount equal to the excess of (x) the fair market value
of the shares on the date of issuance, over (y) the purchase price, if any, paid
for such shares. If the Section 83(b) election is made, the participant will not
recognize any additional income as and when the reacquisition or repurchase
right lapses.
Upon
disposition of the stock acquired upon the receipt of a restricted stock award,
the participant 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 issuance (or vesting) of the stock.
Such gain or loss will be long-term or short-term depending on whether the stock
was held for more than one year.
Restricted Stock Unit Awards.
No taxable income is recognized upon receipt of a restricted stock unit award.
The participant will recognize ordinary income in the year in which the shares
subject to that unit are actually issued to the participant in an amount equal
to the fair market value of the shares on the date of issuance. The participant
and BroadVision will be required to satisfy certain tax withholding requirements
applicable to such income. Subject to the requirement of reasonableness, Section
162(m) of the Code and the satisfaction of a tax reporting obligation, we will
be entitled to an income tax deduction equal to the amount of ordinary income
recognized by the participant at the time the shares are issued. In general, the
deduction will be allowed for the taxable year in which such ordinary income is
recognized by the participant.
Stock Appreciation Rights. No
taxable income is realized upon the receipt of a stock appreciation right. Upon
exercise of the stock appreciation right, the fair market value of the shares
(or cash in lieu of shares) received is recognized as ordinary income to the
participant in the year of such exercise. Generally, with respect to employees,
we are required to withhold from the payment made on exercise of the stock
appreciation right or from regular wages or supplemental wage payments an amount
based on the ordinary income recognized. Subject to the requirement of
reasonableness, Section 162(m) of the Code and the satisfaction of a reporting
obligation, we will be entitled to an income tax deduction equal to the amount
of ordinary income recognized by the participant.
Potential Limitation on Company
Deductions. Section 162(m) of the Code denies a deduction to any publicly
held corporation for compensation paid to certain “covered employees” in a
taxable year to the extent that compensation to such covered employee exceeds $1
million. It is possible that compensation attributable to awards, when combined
with all other types of compensation received by a covered employee from
BroadVision, 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) of the Code, compensation
attributable to stock options and stock appreciation rights will qualify as
performance-based compensation if such awards are approved by a compensation
committee comprised solely of “outside directors” and the plan contains a
per-employee limitation on the number of shares for which such awards may be
granted during a specified period, the per-employee limitation is approved by
the stockholders, and the exercise or strike price of the award is no less than
the fair market value of the stock on the date of grant.
Compensation
attributable to restricted stock awards, restricted stock unit awards and
performance-based awards will qualify as performance-based compensation,
provided that: (i) the award is approved by a compensation committee comprised
solely of “outside directors,” (ii) the award is granted (or exercisable) only
upon the achievement of an objective performance goal established in writing by
the compensation committee while the outcome is substantially uncertain, (iii)
the Compensation Committee certifies in writing prior to the granting (or
exercisability) of the award that the performance goal has been satisfied, and
(iv) prior to the granting (or exercisability) of the award, stockholders have
approved the material terms of the award (including the class of employees
eligible for such award, the business criteria on which the performance goal is
based, and the maximum amount, or formula used to calculate the amount, payable
upon attainment of the performance goal).
Equity Compensation Plan
Information
|
|
|
|
|
|
|
|
|
|
Number of Securities
|
|
|
|
|
|
|
|
|
|
|
Remaining Available
|
|
|
Number of Securities
|
|
Weighted-Average
|
|
for Issuance Under
|
|
|
to be Issued Upon
|
|
Exercise Price of
|
|
Equity Compensation
|
|
|
Exercise of
|
|
Outstanding
|
|
Plans (Excluding
Securities
|
|
|
Outstanding
Options
|
|
Options
|
|
Reflected in Column
(a))
|
Plan Category
|
|
(a)
|
|
(b)
|
|
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
compensation plans approved by security holders(1)
|
|
|
311,359
|
|
|
|
$267.51
|
|
|
|
209,222
|
|
Equity
compensation plans not approved by security holders(2)
|
|
|
44,531
|
|
|
|
$150.61
|
|
|
|
40,549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
355,890
|
|
|
|
$252.88
|
|
|
|
249,771
|
|
(1)
|
Includes
the following: Employee Stock Purchase Plan, 1993 Interleaf Stock Option
Plan, 1994 Interleaf Employee Stock Option Plan and 2006 Equity Incentive
Plan.
|
(2)
|
Includes
the following: the 2000 Non-Officer Equity Incentive Plan (the “2000
Non-Officer Plan”) and non-plan grants. For more information - see Notes 1
and 9 to the Consolidated Financial Statements contained in our Annual
Report on Form 10-K for the fiscal year ended December 31,
2008.
|
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Beneficial Ownership of BroadVision
Common Stock
The
following table sets forth certain information regarding the ownership of our
common stock as of January 31, 2009 by: (a) each current director and each
nominee for director; (b) each of the executive officers named in the
Summary Compensation Table; (c) all of our current executive officers and
directors as a group; and (d) all those known by us to be beneficial owners
of more than five percent of its common stock.
|
|
Beneficial
Ownership(1)
|
|
Beneficial
Owner
|
|
Number of
Shares(#)
|
|
Percent of
Total(%)
|
|
Pehong
Chen (2)
|
|
1,683,174
|
|
37.9
|
%
|
James
D. Dixon (3)
|
|
4,975
|
|
*
|
|
Robert
Lee (4)
|
|
4,309
|
|
*
|
|
François
Stieger (5)
|
|
1,708
|
|
*
|
|
Shin-Yuan
Tzou (6) |
|
30,982
|
|
*
|
|
Honu
Holdings, LLC (2)
1600
Seaport Blvd., North Bldg., Suite 550,
Redwood
City, CA 94063
|
|
1,380,000
|
|
31.5
|
%
|
Funds
Associated with Palo Alto Investors LLC (7)
470
University Avenue
Palo
Alto, CA 94301
|
|
749,649
|
|
17.1
|
%
|
All
Current Directors and Executive Officers as a group (5 persons)
(8)
|
|
1,725,148
|
|
38.6
|
%
|
|
|
|
|
|
|
|
|
*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 SEC.
Unless otherwise 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 4,377,094 shares outstanding on January 31, 2009,
adjusted as required by rules promulgated by the SEC. Our directors and
executive officers can be reached at BroadVision, Inc., 1600 Seaport
Blvd., Suite 550, North Bldg., Redwood City, California
94063.
|
(2)
|
Includes
234,999 shares held in trust by Dr. Chen and his wife for their benefit
and 68,175 shares of common stock issuable upon the exercise of stock
options exercisable within 60 days of January 31, 2009. Also includes
1,380,000 shares held by Honu Holdings, LLC, of which Dr. Chen is the sole
member. Excludes 45,815 shares of common stock held in trust by
independent trustees for the benefit of Dr. Chen's
children.
|
(3)
|
Includes
2,400 shares of common stock issuable upon the exercise of stock options
exercisable within 60 days of January 31, 2009.
|
(4)
|
Includes
2,400 shares of common stock issuable upon the exercise of stock options
exercisable within 60 days of January 31, 2009. Also includes 41 shares
held in trust by Mr. Lee and his wife for their
benefit.
|
(5)
|
Includes
800 shares of common stock issuable upon the exercise of stock options
exercisable within 60 days of January 31, 2009.
|
(6)
|
Includes 18,742
shares of common stock issuable upon the exercise of stock options
exercisable within 60 days of January 31, 2009.
|
(7)
|
Based
on Amendment No. 3 to Schedule 13G filed with the SEC on February 17,
2009, Palo Alto Investors, LLC, Palo Alto Investors and William Leland
Edwards have shared voting and dispositive power with respect to 744,125
shares of common stock (the “PAI Shares”), and Mr. Edwards has sole voting
and disposition power with respect to an additional 5,524 shares of common
stock. Palo Alto Fund II, L.P. has shared voting and disposition power
with respect to 299,902 of the PAI Shares and Micro Cap Partners, L.P.
shared voting and disposition power with respect to 276,732 of the PAI
Shares.
|
(8) |
Includes
the information contained in the notes above, as applicable, for our
directors and executive officers as of January 31, 2009.
|
SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section
16(a) of the Exchange Act requires our directors and executive officers, and
persons who own more than ten percent of a registered class of our equity
securities, to file with the SEC initial reports of ownership and reports of
changes in ownership of our Common Stock and other equity securities. Directors,
officers and greater than ten percent stockholders are required by SEC
regulations to furnish us with copies of all Section 16(a) forms they
file.
To our
knowledge, based solely on a review of the copies of such reports furnished to
us and written representations that no other reports were required, during the
fiscal year ended December 31, 2008 all Section 16(a) filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were complied with.
EXECUTIVE
COMPENSATION
Compensation Discussion And
Analysis
Philosophy
Our
compensation policies are designed to attract and retain key employees,
motivating them to achieve and rewarding them for superior performance. In
allocating total compensation between cash compensation and equity compensation,
the compensation committee focuses on creating incentives geared to both short
and longer-term performance with the goal of increasing stockholder value over
the long term. Executive compensation programs impact all employees by setting
general levels of compensation and helping to create an environment of goals,
rewards and expectations. Because we believe the performance of every employee
is important to our success, we are mindful of the effect of executive
compensation and incentive programs on all of our employees.
We
believe that the compensation of our officers should reflect their success as
individual and as a management team, in attaining key operating objectives, such
as growth of revenues, growth of operating earnings and earnings per share and
growth or maintenance of market share and long-term competitive advantage, and
ultimately, in attaining an increased market price for our stock. We believe
that the performance of the officers in managing BroadVision, considered in
light of general economic and specific company, industry and competitive
conditions, should be the basis for determining their overall compensation. We
also believe that their compensation should not be based on the short-term
performance of our stock, whether favorable or unfavorable, but rather that the
price of our stock will, in the long-term, reflect our operating performance,
and ultimately, the management of the company by our executives. We seek to have
the long-term performance of our stock reflected in executive compensation
through our stock option and other equity incentive programs. In setting our
officers’ compensation, we intend to be competitive with other similarly
situated companies in our industry.
Overview of Compensation and
Process
Elements
of compensation for our executives include: salary, incentive bonus, stock
option awards, health, disability and life insurance, and perquisites. Base
salaries are set for our officers annually by our compensation committee. At the
same time, our compensation committee also approves and adopts an incentive
bonus plan for the new year and typically grants stock option awards to our
officers and certain other eligible employees. The Compensation Committee also
considers stock option awards in connection with new hires and
promotions.
As part
of its annual review of officer compensation, our compensation committee takes
into account each officer’s total compensation package from prior years, as well
as information contained in market surveys. Typically, the chief executive
officer makes compensation recommendations to the compensation committee with
respect to the executive officers who report to him. Such executive officers are
not present at the time of these deliberations. The chairman of the compensation
committee then makes compensation recommendations to the compensation committee
with respect to the chief executive officer, who is absent from that meeting.
The compensation committee may accept or adjust such recommendations and also
makes the sole determination of the chief executive officer’s
compensation.
We choose
to pay each element of compensation in order to attract and retain the necessary
executive talent, reward annual performance and provide incentive for their
balanced focus on long-term strategic goals as well as short-term performance.
The amount of each element of compensation is determined by or under the
direction of our compensation committee. The following are factors that the
compensation committee may take into account in determining the various
components of our officers’ total compensation package:
l
|
Performance
against corporate and individual objectives for the previous
year;
|
l
|
Difficulty
of achieving desired results in the coming year;
|
l
|
Value
of their unique skills and capabilities to support the long-term
performance of the company;
|
l
|
Performance
of their management responsibilities;
|
l
|
Responsibility
and authority of each position relative to other positions within the
company; and
|
l
|
Contributions
as a member of the senior management
team.
|
These
elements fit into our overall compensation objectives by helping to secure the
future potential of our operations, facilitating our entry into new markets,
providing proper compliance and regulatory guidance, and helping to create a
cohesive team.
Our
policy for allocating between long-term and currently paid compensation is to
ensure adequate base compensation to attract and retain the right personnel,
while providing incentives to maximize long-term value for BroadVision and our
stockholders. Likewise, we provide cash compensation in the form of base salary
to meet competitive salary norms and reward good performance on an annual basis
and in the form of profit-sharing compensation to reward superior performance
against specific short-term goals. We provide non-cash compensation to reward
superior performance against specific objectives and long-term strategic goals.
As we continue to focus on executing our turnaround plan and introduce new
products and services to the marketplace, we want our executives that are
leading these initiatives to have strong incentives to see that these
initiatives succeed. At the same time, we want our executives to be
appropriately rewarded if these initiatives do succeed. As a result, we believe
that equity compensation will be a significant component of total compensation
for our key employees.
SUMMARY COMPENSATION TABLE FOR FISCAL
2008, 2007 AND 2006
The
following table shows for the fiscal years ended December 31, 2008, 2007 and
2006, compensation awarded to or paid to, or earned by, Pehong Chen, the
Company’s Chief Executive Officer, and Shin-Yuan Tzou, the Company’s Chief
Financial Officer (the “Named Executive Officers”).
Name and
Principal
Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Awards
($)
|
|
Option
Awards
($)(3)
|
|
Non-Equity Incentive Plan
Compensation
($)(4)
|
|
Change in Pension Value and
Nonqualified Deferred Compensation Earnings ($)
|
|
All Other
Compensation
($)(5)
|
|
Total
|
|
Pehong
Chen, CEO (1)
|
|
2006
|
|
$ |
350,000 |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
58,508 |
|
$ |
10,904 |
|
$ |
16,853 |
|
$ |
436,265 |
|
|
2007
|
|
$ |
350,000 |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
70,285 |
|
$ |
- |
|
$ |
21,264 |
|
$ |
441,559 |
|
|
|
2008
|
|
$ |
350,000 |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
33,325 |
|
$ |
- |
|
$ |
15,700 |
|
$ |
399,025 |
|
Shin-Yuan Tzou, CFO (2) |
|
2008
|
|
$ |
200,000 |
|
$ |
- |
|
$ |
- |
|
$ |
42,636 |
|
$ |
13,168 |
|
$ |
- |
|
$ |
15,587 |
|
$ |
271,391 |
|
(1) Dr.
Chen served as the Company’s Interim Chief Financial Officer from June 2, 2006
to January 15, 2008.
(2) Mr.
Tzou has served as the Company's Chief Financial Officer since January 15,
2008. Because Mr. Tzou was not a named executive officer in 2006 or 2007,
SEC rules do not require his compensation for that year to be
reported.
(3) Stock
option values calculated using the Black-Scholes model under the rules of SFAS
123R, as discussed in the Stock Compensation section of this
report.
(4) Consists
of payment under our Employee Profit Sharing Plan (EPSP). See table below for
details.
(5) Consists of company contribution for heath insurance
coverage. See table below for details.
Employee Profit Sharing Plan (EPSP) -
NON-EQUITY INCENTIVE PLAN COMPENSATION
|
|
|
|
Pehong
Chen
|
2006
|
|
$ |
58,508 |
|
2007
|
|
$ |
70,285
|
|
2008
|
|
$ |
33,325
|
Shin-Yuan
Tzou
|
2008
|
|
$ |
13,168 |
Company Contributions for Health
Coverage - ALL OTHER COMPENSATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pehong
Chen
|
2006
|
|
$ |
13,352 |
|
|
$ |
1,831 |
|
|
$ |
302 |
|
|
$ |
359 |
|
|
$ |
450 |
|
|
$ |
540 |
|
|
$ |
19 |
|
|
$ |
16,853 |
|
|
|
|
$ |
17,598 |
|
|
$ |
1,996 |
|
|
$ |
302 |
|
|
$ |
359 |
|
|
$ |
450 |
|
|
$ |
540 |
|
|
$ |
19 |
|
|
$ |
21,264 |
|
|
2008
|
|
$ |
12,336 |
|
|
$ |
1,819 |
|
|
$ |
247 |
|
|
$ |
290 |
|
|
$ |
423 |
|
|
$ |
570 |
|
|
$ |
15 |
|
|
$ |
15,700 |
|
Shin-Yuan
Tzou
|
2008
|
|
$ |
12,336 |
|
|
$ |
1,819 |
|
|
$ |
247 |
|
|
$ |
290 |
|
|
$ |
423 |
|
|
$ |
457 |
|
|
$ |
15 |
|
|
$ |
15,587 |
|
It is the
goal of our compensation committee to establish salary compensation for our
executive officers based on our operating performance relative to comparable
software and computer peer companies over a three to five year period. In
setting base salaries for fiscal 2008, we reviewed studies conducted and
recommendations issued by the Radford Group of AON Consulting Inc. in 2006 with
respect to the salary compensation of officers with comparable qualifications,
experience and responsibilities at companies in their recommended peer group. It
is not our policy to pay our CEO at the highest level relative to his peers but
rather to set his compensation on a basis relative to the other members of our
senior management team and CEO’s of other similar technology companies. We
believe that this gives us the opportunity to attract and retain talented
managerial employees both at the senior executive level and below. Our
compensation committee does not presently intend to increase the salaries of any
of our officers in 2009.
Employee Profit Sharing
Plan
Our 2008
Employee Profit Sharing Plan (“EPSP”) is designed to reward both executives and
employees alike for the achievement of shorter-term financial goals, principally
achievement of certain levels of Earnings Before Interest Taxes Depreciation and
Amortization, also known as EBITDA. It is our general philosophy that employees
be rewarded for their performance as a team in the attainment of these goals. We
believe that this is important to aligning our executive and employees toward
promoting and rewarding teamwork among them. Although each executive officer is
eligible to receive an award under the EPSP, the granting of the awards to any
individual or the officers as a group is entirely at the discretion of our
compensation committee. The compensation committee may choose to award the bonus
or not, and decide on the actual level of the award in light of all relevant
factors after completion of the year.
In April
of 2008, our compensation committee adopted the 2008 EPSP. Under the terms of
the 2008 EPSP:
l
|
Payouts
are made quarterly, on the first regularly scheduled pay date after the
announcement of quarterly earnings, or on such other date as deemed
appropriate by management;
|
l
|
Eligible
persons are active, full-time, or more than 75% part-time employees who
maintain a satisfactory standing during the entirety of each quarter and
who remain an employee at the time of each quarterly
payout;
|
l
|
Commission-based
employees (those with a sales commission plan) have a portion of their
variable compensation tied to company performance, funded under this EPSP
award pool, with payouts ahead of non-commissioned
employees;
|
l
|
Payouts
to non-commissioned employees are targeted at a certain percentage of each
individual's base salary, set and/or adjusted with management
discretion;
|
l
|
All
amounts earned but not paid under the plan (reductions from any “merit
factor”, resignations with positive profit-sharing accruals, etc.) are
eliminated, going back into company earnings;
|
l
|
Allocation
of the award pool will be determined as a percentage of profits. After the
close of each quarter, our management, in its sole discretion, will set
the percentage for the corresponding quarter. Payouts will be subject to
adjustment by our management and our Chief Executive Officer will have the
ability to make the final determination of all profitability
payments.
|
The terms
of our 2007 EPSP and 2006 EPSP were similar to those of the 2008
EPSP.
Stock Option and Equity Incentive
Programs
We intend
for our stock option award program to be the primary vehicle for offering
long-term incentives and rewarding our officers and other key employees. We
regard this as a key retention tool. Because of the relationship between the
value of an option and the market price of our common stock, we have always
believed that granting stock options is the best method of motivating our
executive officers to manage BroadVision in a manner that is consistent with the
interests of our stockholders.
Stock
Options Granted
We grant
stock options under our 2006 Equity Incentive Plan to our officers and other key
employees based upon prior performance, the importance of retaining their
services and the potential for their performance to help us attain our long-term
goals. However, there is no set formula for the granting of awards to individual
executives or employees. In 2008, under all equity
compensation plans, we granted stock options to purchase an aggregate of
125,978 shares of stock representing approximately 2.88% of the
outstanding shares of our common stock on December 31, 2008 on a fully diluted
basis. Of this
amount, one option to acquire 6,000 shares of stock was issued to Shin-Yuan
Tzou, our Chief Financial Officer.
Timing
of Grants
Stock
option awards to our executive officers and other key employees are typically
granted annually in conjunction with the review of the individual performance of
our executive officers. The exercise price of all stock options is set at the
last reported sale price of our common stock on the grant date.
Perquisites
We limit
the perquisites that we make available to our executive officers, particularly
in light of recent developments with respect to corporate crime and abuse
involving perquisites. Our executives are entitled to few benefits that are not
otherwise available to all of our employees. In this regard it should be noted
that we do not provide pension arrangements, post-retirement health coverage
other than COBRA, or similar benefits for our executives or
employees.
The
perquisites we provided in fiscal 2008 are as follows: All employees are
eligible to participate in the 401(k) retirement plan if they so choose. We do
not match any funds contributed by employees. Our health and insurance plans are
the same for all employees. In general, and depending upon the employee’s
choice, our employees pay 20% of the health premium due. We do not provide other
perquisites such as country club memberships, jet aircraft, limousine service,
estate or financial planning services, etc.
GRANTS
OF PLAN-BASED AWARDS
Name
and Principal Position
|
|
Grant
Date
|
|
All
Other Options Awards: Number of Securities Underlying
Options
|
|
|
Exercise
or Base Price of Option Awards ($/Sh)
|
|
|
Grant
Date Fair Value of Stock and Option Awards
|
|
Shin-Yuan
Tzou
|
|
4/16/2008
|
|
|
6,000 |
|
|
$ |
29.25 |
|
|
$ |
175,500 |
|
On April
16, 2008, the Compensation Committee granted stock options to purchase 6,000
shares to Shin-Yuan Tzou, our Chief Financial Officer. In keeping with our
standard policy and practice, the exercise price of the stock options that were
awarded was $29.25 per share, the last sale price of our common stock on the
date of grant, as quoted on the Nasdaq Global Market. The options have a life of
10 years and vest monthly for 36 months from the vesting commencement date,
April16, 2008.
OUTSTANDING EQUITY AWARDS AT DECEMBER
31, 2008
The
following table shows for the fiscal year ended December 31, 2008, certain
information regarding outstanding equity awards at fiscal year end for our Named
Executive Officer:
|
|
Option
Awards
|
Stock
Awards
|
|
Name
|
|
Number of Securities Underlying
Unexercised Options (#) Exercisable
|
|
Number of Securities Underlying
Unexercised Options (#) Unexercisable
|
Equity Incentive Plan Awards:
Number of Securities Underlying Unexercised Unearned Options (#)
(1)
|
|
Option Exercise Price
($)
|
|
Option Expiration
Date
|
Number of Shares or Units of
Stock That Have Not Vested (#)
|
|
Market Value of Shares or Units
of Stock That Have Not Vested ($)
|
|
Equity Incentive Plan Awards:
Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#)
|
Equity Incentive Plan Awards:
Market or Payout Value of Unearned Shares, Units or Other Rights That Have
Not Vested ($)
|
Pehong
Chen
|
|
|
19,999
|
|
-
|
-
|
|
$
|
1,500.00
|
|
6/23/2009
|
-
|
|
$
|
-
|
|
-
|
$
|
-
|
|
|
|
20,000
|
|
-
|
-
|
|
$
|
1,662.00
|
|
5/25/2011
|
-
|
|
$
|
-
|
|
-
|
$
|
-
|
|
|
|
177
|
|
-
|
-
|
|
$
|
875.20
|
|
11/27/2011
|
-
|
|
$
|
-
|
|
-
|
$
|
-
|
|
|
|
2,222
|
|
-
|
-
|
|
$
|
465.70
|
|
2/19/2012
|
-
|
|
$
|
-
|
|
-
|
$
|
-
|
|
|
|
25,777
|
|
-
|
-
|
|
$
|
54.00
|
|
10/30/2012
|
-
|
|
$
|
-
|
|
-
|
$
|
-
|
Shin-Yuan
Tzou |
|
|
399
|
|
-
|
-
|
|
$ |
1,068.75
|
|
5/25/2009
|
-
|
|
$ |
-
|
|
-
|
$
|
-
|
|
|
|
222
|
|
-
|
-
|
|
$ |
6,046.88
|
|
4/18/2010
|
-
|
|
$ |
-
|
|
-
|
$
|
-
|
|
|
|
888
|
|
-
|
-
|
|
$ |
1,662.75
|
|
5/25/2011
|
-
|
|
$ |
-
|
|
-
|
$
|
-
|
|
|
|
234
|
|
-
|
-
|
|
$ |
875.25
|
|
1/27/2011
|
-
|
|
$ |
-
|
|
-
|
$
|
-
|
|
|
|
266
|
|
-
|
-
|
|
$ |
198.00
|
|
5/30/2012
|
-
|
|
$ |
-
|
|
-
|
$
|
-
|
|
|
|
2,920
|
|
-
|
-
|
|
$ |
37.50
|
|
10/23/2012
|
-
|
|
$ |
-
|
|
-
|
$
|
-
|
|
|
|
12,480
|
|
-
|
-
|
|
$ |
14.25
|
|
3/3/2016
|
-
|
|
$ |
-
|
|
-
|
$
|
-
|
|
|
|
1,333
|
|
4,667
|
-
|
|
$ |
29.25
|
|
4/16/2018
|
-
|
|
$ |
-
|
|
-
|
$
|
-
|
(1) We do
not issue stock options in any direct formulaic performance based
plan.
Post-Employment
Compensation
Pension Benefits
We do not
provide pension arrangements or post-retirement health coverage for our
executives or employees. All employees, including our executives, are eligible
to participate in our 401(k) contributory defined contribution plan. We do not
make any contribution to or make any matching contribution to the
401(k).
Nonqualified
Deferred Compensation
We
provide a 401(k) nonqualified defined contribution plan for all employees. We do
not match any employee contributions. Amounts shown below are totally from our
Named Executive Officers. Our Plan is administered by Fidelity Investments and
brokered by the NWK Group.
Other
Post-Employment Payments
All
of our employees, including our officers, are employees-at-will and as such do
not have employment contracts with us, except in the case of one officer of our
EMEA foreign subsidiaries. We also do not provide post-employment health
coverage or other benefits, except in connection with the Severance Benefit Plan
which is described below.
POTENTIAL PAYMENTS UNDER RETENTION
AGREEMENTS
The table
below describes the amounts of current and future compensation benefits that our
Named Executive Officers would receive under various change of control or
termination scenarios as of December 31, 2008. Under our 2008 benefit plan the
benefits are the same for a voluntary termination, early retirement, or normal
retirement on December 31, 2008. Our Change of Control Plan, in the context of
an Involuntary For Good Reason Termination, only provides for benefits intended
to compensate management for lost wages and longer term health and displacement
benefits. There are certain graduated levels of benefits for the executives
depending upon their responsibility levels and seniority with the company. Under
the Involuntary Not For Cause Termination scenario the benefits are reduced,
while a For Cause Termination would result in little or no benefits beyond those
earned up to the termination date, assumed for purposes of this table to be
midnight December 31, 2008. This means the For Cause terminated employee would
be entitled to only shares and stock options vested, profit sharing and accrued
vacation earned through December 31, 2008 and no further compensation. In the
case of disability on December 31, 2008, the employee would be entitled to the
additional benefits of long-term disability insurance payouts for up to one
year. In the case of death on December 31, 2008, the benefit additional to the
employee would include the present value of all life insurance proceeds until
normal retirement age of 65.
TERMINATION OR CHANGE OF
CONTROL
|
|
Executive Benefits and Payments
Upon Separation
|
|
|
Voluntary Termination on
12/31/08($)
|
|
|
Early Retirement on
12/31/08($)
|
|
|
Normal Retirement on
12/31/08($)
|
|
|
Involuntary Not For Cause
Termination on 12/31/08($)
|
|
|
For Cause Termination on
12/31/08($)
|
|
|
Involuntary For Good Reason
Termination (Change in Control) on 12/31/08($)
|
|
|
Disability on
12/31/08($)
|
|
|
Death on
12/31/08($)
|
|
Pehong
Chen
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-Term
Incentive Compensation
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Stock
Options
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits &
Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
Compensation Program
|
|
|
$
|
48,656
|
|
|
$
|
48,656
|
|
|
$
|
48,656
|
|
|
$
|
48,656
|
|
|
$
|
48,656
|
|
|
$
|
48,656
|
|
|
$
|
48,656
|
|
|
$
|
48,656
|
|
|
Health
& Welfare Benefits
|
|
|
$
|
1,381
|
|
|
$
|
1,381
|
|
|
$
|
1,381
|
|
|
$
|
16,568
|
|
|
$
|
-
|
|
|
$
|
33,136
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Disability
Income
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,422,003
|
|
|
$
|
-
|
|
|
Life
Insurance Benefits
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
500,000
|
|
|
Cash
Severance
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
350,000
|
|
|
$
|
-
|
|
|
$
|
700,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Accrued
Vacation Pay
|
|
|
$
|
47,900
|
|
|
$
|
47,900
|
|
|
$
|
47,900
|
|
|
$
|
47,900
|
|
|
$
|
47,900
|
|
|
$
|
47,900
|
|
|
$
|
47,900
|
|
|
$
|
47,900
|
|
Shin-Yuan
Tzou |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-Term
Incentive Compensation |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
Stock
Options |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits
& Perquisites: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
Compensation Program |
|
|
$ |
130,394 |
|
|
$ |
130,394 |
|
|
$ |
130,394 |
|
|
$
|
130,394 |
|
|
$ |
130,394 |
|
|
$ |
130,394 |
|
|
$ |
130,394 |
|
|
$ |
130,394 |
|
|
Health
& Welfare Benefits |
|
|
$ |
1,371 |
|
|
$ |
1,371 |
|
|
$ |
1,371 |
|
|
$ |
8,225 |
|
|
$ |
- |
|
|
$ |
20,562 |
|
|
$ |
- |
|
|
$ |
- |
|
|
Disability
Income |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
1,422,003 |
|
|
$ |
- |
|
|
Life
Insurance Benefits |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
400,000 |
|
|
Cash
Severance |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
100,000 |
|
|
$ |
- |
|
|
$ |
250,000 |
|
|
$ |
- |
|
|
$ |
- |
|
|
Accrued
Vacation Pay |
|
|
$ |
26,603 |
|
|
$ |
26,603 |
|
|
$ |
26,603 |
|
|
$ |
26,603 |
|
|
$ |
26,603 |
|
|
$ |
26,603 |
|
|
$ |
26,603 |
|
|
$ |
26,603 |
|
Disability
Income:
Assumes Present Value of all Future
Benefits Until Normal Retirement Age
|
|
Age on
|
|
Years to
Age
|
|
Discount
Rate
|
|
|
Present
Value
|
|
Name
|
|
12/31/08
|
|
65
|
|
2.5%
|
|
|
of the
Annuity
|
|
Pehong
Chen
|
|
51
|
|
14
|
|
2.5%
|
|
$
|
1,422,003
|
|
Shin-Yuan
Tzou |
|
51
|
|
14
|
|
2.5%
|
|
$
|
1,422,003 |
|
Severance Benefit
Plan
On March
26, 2007, our Board approved the Severance Benefit Plan (the “Plan”) for certain
of our eligible employees. The Plan provides for the payment of certain benefits
to employees if (i) the employee has been continuously employed for a period of
one year or more; (ii) if we terminate the employee’s employment pursuant to (a)
an Involuntary Termination Without Cause or (b) Constructive Termination within
one month prior to or 24 months following a Change of Control; and (iii) we
notify the employee in writing that he or she is eligible for participation in
the Plan. Such notification will include details of the level(s) of
participation applicable to the Eligible Employee. We in our sole discretion,
will make determinations as to whether employees are “Eligible Employees.” We
have made no such determinations to date. Undefined capitalized terms in this
description are defined in the Plan. The Plan is meant to replace all prior
arrangements and plans we previously have maintained, other than local plans for
specific subsidiaries or countries.
The Plan
provides for the following benefits:
No
change of control
Designated
Eligible Employees involuntarily terminated without cause shall receive a cash
severance benefit (in addition to certain other benefits as detailed in the
Plan) in accordance with our then-current payroll practices as
follows:
Employee
Designation
|
|
Base
|
|
Accrual/Yr
|
|
Maximum
|
CEO
|
|
6.00
Mo.
|
|
1.00
Mo/Yr.
|
|
12.00
Mo.
|
EVP
|
|
3.00
Mo.
|
|
0.50
Mo/Yr.
|
|
6.00
Mo.
|
SVP
|
|
2.00
Mo.
|
|
0.50
Mo/Yr.
|
|
5.00
Mo.
|
VP
|
|
1.00
Mo.
|
|
0.50
Mo/Yr.
|
|
4.00
Mo.
|
Director
|
|
0.50
Mo.
|
|
0.42
Mo./Yr.
|
|
3.00
Mo.
|
Manager
|
|
0.50
Mo.
|
|
0.25
Mo./Yr.
|
|
2.00
Mo.
|
Employee
|
|
0.50
Mo.
|
|
0.08
Mo./Yr.
|
|
1.00
Mo.
|
Change of
control
There are
three categories of Eligible Employees covered in a Change of Control situation:
Level I, Level II and Level III as hereinafter defined. Level I Eligible
Employees are defined as those Company Executive Officers designated by the
Compensation Committee as Level I Eligible Employees. Level II Eligible
Employees are defined as those Non-Executive Company Officers who report
directly to the CEO and who are designated by the CEO as Level II Eligible
Employees. Level III Eligible Employees are defined as those Non-Executive
Company Officers and Department Managers who report either directly to the CEO
or to Level II Eligible Employees and who are designated by the CEO as Level III
Eligible Employees.
Designated
Eligible Employees terminated shall receive a cash severance benefit (in
addition to certain other benefits as detailed in the Plan) in accordance with
our then-current payroll practices as follows:
Employee
Level
|
|
Base
(Number of Mo. Base Salary After 1 Year Tenure)
|
|
Accelerator
(Number of Mo. Base Salary Accrued Per Each Yr. of Additional
Tenure)
|
|
Maximum
Years Tenure Accelerator Applied
|
|
Maximum
Months Base Salary Accrual Allowed
|
Level
I
|
|
9
|
|
1.25
|
|
12
|
|
24
|
Level
II
|
|
6
|
|
1.00
|
|
9
|
|
15
|
Level
III
|
|
3
|
|
0.75
|
|
8
|
|
9
|
The
vesting and exercisability of unvested stock options held by an Eligible
Employee that are outstanding as of the Eligible Employee's termination date,
beginning with the earliest unvested installments, shall be accelerated
according to the following chart:
Employee
Level
|
|
Base (Percentage of Unvested
Stock Options Accelerated After 1 Year Tenure)
|
|
Accelerator (Percentage of
Unvested Stock Options Accelerated per Each Yr. of Additional
Tenure)
|
|
Maximum (Total % of Unvested
Stock Options Allowed to be Accelerated)
|
Level
I
|
|
30%
|
|
7.8%
|
|
100%
|
Level
II
|
|
25%
|
|
6.1%
|
|
80%
|
Level
III
|
|
20%
|
|
4.4%
|
|
60%
|
DIRECTOR COMPENSATION FOR FISCAL
2008
The
following table shows for the fiscal year ended December 31, 2008 certain
information with respect to the compensation of all non-employee directors of
the Company:
Name
|
|
Earned or Paid in Cash
($)
|
|
Stock Awards
($)
|
|
Option Awards
($)
|
|
Non-Equity Incentive Plan
Compensation
($)
|
|
Change in Pension Value and
Nonqualified Deferred Compensation Earnings
($)
|
|
All Other Compensation
($)
|
|
Total
($)
|
Robert
Lee
|
|
-
|
|
$15,990
|
|
-
|
|
-
|
|
-
|
|
-
|
|
$15,990
|
James
Dixon
|
|
-
|
|
$19,982
|
|
-
|
|
-
|
|
-
|
|
-
|
|
$19,982
|
François
Stieger
|
|
-
|
|
$15,990
|
|
-
|
|
-
|
|
-
|
|
-
|
|
$15,990
|
Overview of Director Compensation and
Procedures
We review
the level of compensation of our non-employee directors on an annual basis. To
determine how appropriate the current level of compensation for our non-employee
directors is, we have historically obtained data from a number of different
sources including the surveys conducted by the Radford Group in 2006. Other data
sources used in our analysis included:
l
|
Publicly
available data describing director compensation in peer
companies;
|
l
|
Survey
data collected by our human resources department; and
|
l
|
Information
obtained directly from other
companies.
|
We
compensate non-employee members of the board through stock options. We do not
pay our non-employee directors any cash remuneration other than reimbursement of
travel expenses and deminimus items.
Compensation Committee Interlocks
and Insider Participation
No member
of the Compensation Committee has served as one of our officers or employees at
any time. None of our executive officers serve as a member of the compensation
committee of any other company that has an executive officer serving as a member
of our board. None of our executive officers serve as a member of the board of
directors of any other company that has an executive officer serving as a member
of our Compensation Committee.
Compensation
Committee Report (*)
The
Compensation Committee has reviewed the Compensation Discussion and Analysis and
discussed that Analysis with management. Based on its review and discussions
with management, the committee recommended to our Board of Directors that the
Compensation Discussion and Analysis be included in this proxy statement and
incorporated into our Annual Report on Form 10-K for 2008. This report is
provided by the following independent directors, who comprise the
committee:
James
Dixon, Compensation Committee Member
Robert
Lee, Compensation Committee Chair
* The material in this report is not “soliciting
material,” is not deemed “filed” with the SEC, and is not incorporated by
reference into any filing of the Company under the Securities Act of 1933, as
amended (the “Securities Act”), or the Exchange Act.
CERTAIN RELATIONSHIPS AND RELATED
PARTY TRANSACTIONS
Since
January 1, 2008, there has not been, nor is there currently proposed, any
transaction or series of similar transactions to which we were or are a party in
which the amount involved exceeds or exceeded $120,000 and in which any
director, executive officer or beneficial holder of more than 5% of any class of
our voting securities or members of such person’s immediate family had or will
have a direct or indirect material interest other than as described below. It is
our policy that future transactions between us and any of our directors,
executive officers or related parties will be subject to the review and approval
of our Audit Committee or other committee comprised of independent,
disinterested directors.
Director
and Officer Indemnification
Our
revised and restated certificate of incorporation contains provisions limiting
the liability of directors. In addition, we have entered into agreements to
indemnify our directors and executive officers to the fullest extent permitted
under Delaware law.
We have
entered into indemnity agreements with certain officers and directors that
provide, among other things, that we will indemnify such officer or director,
under the circumstances and to the extent provided for in such agreement, for
expenses, damages, judgments, fines and settlements he or she may be required to
pay in actions or proceedings to which he or she is or may be made a party be
reason of his or her position as a director, officer or other agent of
BroadVision, and otherwise to the full extent permitted under Delaware law and
our Bylaws.
HOUSEHOLDING
OF PROXY MATERIALS
The SEC
has adopted rules that permit companies and intermediaries (e.g., brokers) to
satisfy the delivery requirements for Notices of Internet Availability of Proxy
Materials or other Annual Meeting materials with respect to two or more
stockholders sharing the same address by delivering a single Notice of Internet
Availability of Proxy Materials or other Annual Meeting materials addressed to
those stockholders. This process, which is commonly referred to as
“householding,” potentially means extra convenience for stockholders and cost
savings for companies.
This
year, a number of brokers with account holders who are our stockholders will be
“householding” our proxy materials. A single Notice of Internet Availability of
Proxy Materials will be delivered to multiple stockholders sharing an address
unless contrary instructions have been received from the affected stockholders.
Once a stockholder has received a broker notice that it will be “householding”
communications to that stockholder’s address, “householding” will continue until
the stockholder is notified otherwise or until consent is revoked. If, at any
time, the stockholder no longer wishes to participate in “householding” and
would prefer to receive a separate Notice of Internet Availability of Proxy
Materials, that stockholder should notify the broker or direct a written request
to: Corporate Secretary, BroadVision, Inc., 1600 Seaport Boulevard, Suite 550,
North Building, Redwood City, California 94063 or contact Investor Relations at
(650) 331-1000. Stockholders who currently receive multiple copies of the Notice
of Internet Availability of Proxy Materials at their address and would like to
request “householding” of their communications should contact their
broker.
OTHER MATTERS
The Board
of Directors knows of no other matters that will be presented for consideration
at the Annual Meeting. If any other matters are properly brought before the
meeting, it is the intention of the persons named in the accompanying proxy to
vote on such matters in accordance with their best judgment.
By Order
of the Board of Directors
/s/ Sandra
Adams
SANDRA ADAMS
Secretary and General
Counsel
March 17,
2009
A copy of
our Annual Report to the Securities and Exchange Commission on Form 10-K for the
fiscal year ended December 31, 2008 is available without charge upon written
request to: Corporate Secretary, BroadVision, Inc., 1600 Seaport Boulevard,
Suite 550, North Building, Redwood City, California 94063.
Appendix A
BROADVISION, INC.
AMENDED AND RESTATED 2006 EQUITY
INCENTIVE PLAN
APPROVED BY BOARD: JULY 7,
2006
APPROVED BY STOCKHOLDERS: AUGUST 8,
2006
AMENDED BY THE BOARD: APRIL 16,
2008
APPROVED BY THE
STOCKHOLDERS: JUNE 5, 2008
AMENDED BY THE
BOARD: JANUARY 21, 2009
APPROVED BY THE
STOCKHOLDERS: [_________], 2009
Reflects the
25-to-one reverse stock split effected October 24, 2008
1. GENERAL.
(a) Eligible Award
Recipients. The
persons eligible to receive Awards are Employees, Directors and
Consultants.
(b) Available Awards. The Plan
provides for the grant of the following Awards: (i) Incentive Stock Options,
(ii) Nonstatutory Stock Options, (iii) Restricted Stock Awards, (iv) Restricted
Stock Unit Awards, (v) Stock Appreciation Rights, (vi) Performance Stock Awards,
(vii) Performance Cash Awards, and (viii) Other Stock Awards.
(c) General Purpose. The
Company, by means of the Plan, seeks to secure and retain the services of the
group of persons eligible to receive Awards as set forth in Section 1(a), to
provide incentives for such persons to exert maximum efforts for the success of
the Company and any Affiliate and to provide a means by which such eligible
recipients may be given an opportunity to benefit from increases in value of the
Common Stock through the granting of Stock Awards.
2. ADMINISTRATION.
(a) Administration by
Board. The
Board shall administer the Plan unless and until the Board delegates
administration of the Plan to a Committee or Committees, as provided in Section
2(c).
(b) Powers of Board. The
Board shall have the power, subject to, and within the limitations of, the
express provisions of the Plan:
(i) To
determine from time to time (A) which of the persons eligible under the Plan
shall be granted Awards; (B) when and how each Award shall be granted; (C) what
type or combination of types of Award shall be granted; (D) the provisions of
each Award granted (which need not be identical), including the time or times
when a person shall be permitted to receive cash or Common Stock pursuant to a
Stock Award; and (E) the number of shares of Common Stock with respect to which
a Stock Award shall be granted to each such person; and (F) the Fair Market
Value applicable to a Stock Award.
(ii) To
construe and interpret the Plan and 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 or in the written terms of a Performance
Cash Award, in a manner and to the extent it shall deem necessary or expedient
to make the Plan or Award fully effective.
(iii) To settle
all controversies regarding the Plan and Awards granted under it.
(iv) To
accelerate the time at which a Stock Award may first be exercised or the time
during which an Award or any part thereof will vest in accordance with the Plan,
notwithstanding the provisions in the Award stating the time at which it may
first be exercised or the time during which it will vest.
(v) To
suspend or terminate the Plan at any time. Suspension or termination of the Plan
shall not impair rights and obligations under any Stock Award granted while the
Plan is in effect except with the written consent of the affected
Participant.
(vi) To amend
the Plan in any respect the Board deems necessary or advisable, including,
without limitation, by adopting amendments relating to Incentive Stock Options
and certain nonqualified deferred compensation under Section 409A of the Code
and/or to bring the Plan or Awards granted under the Plan into compliance
therewith, subject to the limitations, if any, of applicable law. However,
except as provided in Section 9(a) relating to Capitalization
Adjustments, to the extent required by applicable law or listing requirements,
stockholder approval shall be required for any amendment of the Plan that either
(A) materially increases the number of shares of Common Stock available for
issuance under the Plan, (B) materially expands the class of individuals
eligible to receive Awards under the Plan, (C) materially increases the benefits
accruing to Participants under the Plan or materially reduces the price at which
shares of Common Stock may be issued or purchased under the Plan, (D) materially
extends the term of the Plan, or (E) expands the types of Awards available for
issuance under the Plan. Except as provided above, rights under any Award
granted before amendment of the Plan shall not be impaired by any amendment of
the Plan unless (1) the Company requests the consent of the affected
Participant, and (2) such Participant consents in
writing.
(vii) To submit
any amendment to the Plan for stockholder approval, including, but not limited
to, amendments to the Plan intended to satisfy the requirements of (A) Section
162(m) of the Code regarding the exclusion of performance-based compensation
from the limit on corporate deductibility of compensation paid to Covered
Employees, (B) Section 422 of the Code regarding “incentive stock options” or
(C) Rule 16b-3.
(viii) To
approve forms of Award Agreements for use under the Plan and to amend the terms
of any one or more Awards, including, but not limited to, amendments to provide
terms more favorable to the Participant than previously provided in the Award
Agreement, subject to any specified limits in the Plan that are not subject to
Board discretion; provided
however, that except with respect to amendments that disqualify or impair
the status of an Incentive Stock Option, a Participant’s rights under any Award
shall not be impaired by any such amendment unless (A) the Company requests the
consent of the affected Participant, and (B) such Participant consents in
writing. Notwithstanding the foregoing, subject to the limitations of
applicable law, if any, the Board may amend the terms of any one or more Awards
without the affected Participant’s consent if necessary to maintain the
qualified status of the Award as an Incentive Stock Option or to bring the Award
into compliance with Section 409A of the Code.
(ix) 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 and that are not in
conflict with the provisions of the Plan or Awards.
(x) To adopt
such procedures and sub-plans as are necessary or appropriate to permit
participation in the Plan by Employees, Directors or Consultants who are foreign
nationals or employed outside the United States.
(xi) To
effect, at any time and from time to time, with the consent of any adversely
affected Participant, (A) the reduction of the exercise price (or strike price)
of any outstanding Option or SAR under the Plan; (B) the cancellation of any
outstanding Option or SAR under the Plan and the grant in substitution therefor
of (1) a new Option or SAR under the Plan or another equity plan of the Company
covering the same or a different number of shares of Common Stock, (2) a
Restricted Stock Award, (3) a Restricted Stock Unit Award, (4) an Other Stock
Award, (5) cash and/or (6) other valuable consideration (as determined by the
Board, in its sole discretion); or (C) any other action that is treated as a
repricing under generally accepted accounting principles.
(c) Delegation to
Committee.
(i) General. The
Board may delegate some or all of the administration of the Plan to a Committee
or Committees. If administration of the Plan is delegated to a Committee, the
Committee shall have, in connection with the administration of the Plan, the
powers theretofore possessed by the Board that have been delegated to the
Committee, including the power to delegate to a subcommittee of the Committee
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 retain the authority to concurrently administer the Plan with the
Committee and may, at any time, revest in the Board some or all of the powers
previously delegated.
(ii) Section 162(m) and Rule 16b-3
Compliance. In the
sole discretion of the Board, the Committee may consist solely of two or more
Outside Directors, in accordance with Section 162(m) of the Code, or solely of
two or more Non-Employee Directors, in accordance with Rule 16b-3. In addition,
the Board or the Committee, in its sole discretion, may (A) delegate to a
Committee of Directors who need not be Outside Directors the authority to grant
Awards to eligible persons who are either (I) 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 (II) not persons with respect to whom the
Company wishes to comply with Section 162(m) of the Code, or (B) delegate to a
Committee of Directors who need not be Non-Employee Directors the authority to
grant Stock Awards to eligible persons who are not then subject to Section 16 of
the Exchange Act.
(d) Delegation to an
Officer. The Board
may delegate to one (1) or more Officers the authority to do one or both of the
following: (i) designate Employees, who are not Officers, to be recipients of
Options and Stock Appreciation Rights (and, to the extent permitted by
applicable law, other Stock Awards) and the terms thereof, and (ii) determine
the number of shares of Common Stock to be subject to such Stock Awards granted
to such Employees; provided,
however, that the Board resolutions regarding such delegation shall
specify the total number of shares of Common Stock that may be subject to the
Stock Awards granted by such Officer and that such Officer may not grant a Stock
Award to himself or herself. Notwithstanding the foregoing, the Board
may not delegate authority to an Officer to determine the Fair Market Value
pursuant to Section 13(w)(iii)
below.
(e) Effect of Board’s
Decision. All
determinations, interpretations and constructions made by the Board in good
faith shall not be subject to review by any person and shall be final, binding
and conclusive on all persons.
3. SHARES SUBJECT TO THE
PLAN.
(a) Share Reserve. Subject
to the provisions of Section 9(a) relating to Capitalization Adjustments,
the aggregate number of shares of Common Stock that may be issued pursuant to
Stock Awards from and after the Effective Date shall not exceed, in the
aggregate, four hundred thirty-four thousand eight hundred seven (434,807)
shares of Common Stock. In addition, the number of
shares of Common Stock available for issuance under the Plan shall automatically
increase on January 1st of each year for a period of ten (10) years commencing
on January 1, 2010 and ending on (and including) January 1, 2019, in an amount
equal to the lesser of: (i) four percent (4%) of the total number of shares of
Common Stock outstanding on December 31st of the preceding calendar
year, (ii) a number of shares such that,
following such increase, the aggregate number of shares that have been reserved
for issuance under the Plan equals twenty-five percent (25%) of the total number
of shares of Common Stock outstanding on December 31st of the preceding calendar
year and (iii) a number of shares such that, following such increase, the
aggregate number of shares available for issuance under the Plan and not subject
to outstanding Stock Awards equals ten percent (10%) of the total number of
shares of Common Stock outstanding on December 31st of the preceding calendar year. Notwithstanding the foregoing, the Board may act prior
to the first day of any calendar year, to provide that there shall be no
increase in the share reserve for such calendar year or that the increase in the
share reserve for such calendar year shall be a lesser number of shares of
Common Stock than would otherwise occur pursuant to the preceding
sentence. For clarity, the
limitation in this Section 3(a) is a limitation in the number of shares of
Common Stock that may be issued pursuant to the Plan. Accordingly,
this Section 3(a) does not limit the granting of Stock Awards except as provided
in Section 7(a). Shares may be
issued in connection with a merger or acquisition as permitted by NASDAQ
Marketplace Rule 4350(i)(1)(A)(iii), NYSE Listed Company Manual Section 303A.08,
AMEX Company Guide Section 711, as applicable, or other stock exchange rules,
and such issuance shall not reduce the number of shares available for issuance
under the Plan. Furthermore, if a Stock Award or any portion thereof
(i) expires or otherwise terminates without all of the shares covered by such
Stock Award having been issued or (ii) is settled in cash (i.e., the Participant receives cash rather than stock), such
expiration, termination or settlement shall not reduce (or otherwise offset) the
number of shares Common Stock that may be available for issuance under the
Plan.
(b) Reversion of Shares to the Share
Reserve.
(i) Shares Available For Subsequent
Issuance. If any
(i) Stock Award shall for any reason expire or otherwise terminate, in whole or
in part, without having been exercised in full, (ii) shares of Common Stock
issued to a Participant pursuant to a Stock Award are forfeited to or
repurchased by the Company at their original exercise or purchase price pursuant
to the Company’s reacquisition or repurchase rights under the Plan, including
any forfeiture or repurchase caused by the failure to meet a contingency or
condition required for the vesting of such shares, or (iii) Stock Award is
settled in cash, then the shares of Common Stock not issued under such Stock
Award, or forfeited to or repurchased by the Company, shall revert to and again
become available for issuance under the Plan.
(ii) Other Shares Available for Subsequent
Issuance. If any
shares subject to a Stock Award are not delivered to a Participant because the
Stock Award is exercised through a reduction of shares subject to the Stock
Award (i.e., “net
exercised”) or an appreciation distribution in respect of a Stock Appreciation
Right is paid in shares of Common Stock, the number of shares subject to the
Stock Award that are not delivered to the Participant shall remain available for
subsequent issuance under the Plan. If any shares subject to a Stock Award are
not delivered to a Participant because such shares are withheld in satisfaction
of the withholding of taxes incurred in connection with the exercise of an
Option, Stock Appreciation Right, or the issuance of shares under a Restricted
Stock Award or Restricted Stock Unit Award, the number of shares that are not
delivered to the Participant shall remain available for subsequent issuance
under the Plan. If the exercise price of any Stock Award is satisfied by
tendering shares of Common Stock held by the Participant (either by actual
delivery or attestation), then the number of shares so tendered shall remain
available for subsequent issuance under the Plan.
(c) Incentive Stock Option
Limit. Notwithstanding
anything to the contrary in Section 3(b), subject to the provisions of
Section 9(a) relating to Capitalization Adjustments, the aggregate maximum
number of shares of Common Stock that may be issued pursuant to the exercise of
Incentive Stock Options shall be 1,300,000 shares of Common Stock.
(d) Source of Shares. The
stock issuable under the Plan shall be shares of authorized but unissued or
reacquired Common Stock, including shares repurchased by the Company on the open
market or otherwise.
4. ELIGIBILITY.
(a) Eligibility for Specific Stock
Awards. Incentive
Stock Options may be granted only to employees of the Company or a “parent
corporation” or “subsidiary corporation” thereof (as such terms are defined in
Sections 424(e) and (f) of the Code). Stock Awards other than
Incentive Stock Options may be granted to Employees, Directors and
Consultants; provided, however, Nonstatutory Stock Options and SARs may not be granted
to Employees, Directors, and Consultants who are providing Continuous Services
only to any “parent” (as such term is defined in Rule 405 promulgated under the
Securities Act) of the Company, unless such Stock Awards comply with the
distribution requirements of Section 409A of the
Code.
(b) Ten Percent
Stockholders. A Ten
Percent Stockholder shall not be granted an Incentive Stock Option unless the
exercise price of such Option is at least one hundred ten percent (110%) of the
Fair Market Value on the date of grant and the Option is not exercisable after
the expiration of five (5) years from the date of grant.
(c) Consultants. 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, because the Consultant is not a natural person, or
because of any other rule governing the use of Form S-8.
(d) Section 162(m) Limitation on Annual
Grants. Subject to the
provisions of Section 9(a) relating to Capitalization Adjustments, at
such time as the Company may be subject to the applicable provisions of Section
162(m) of the Code, no Participant shall be eligible to be granted during any
calendar year Options, Stock Appreciation Rights and Other Stock Awards whose
value is determined by reference to an increase over an exercise or strike price
of at least one hundred percent (100%) of the Fair Market Value on the date the
Stock Award is granted covering more than four hundred thirty-four thousand
eight hundred seven (434,807) shares of Common
Stock.
5. PROVISIONS RELATING TO
OPTIONS.
Each
Option shall be in such form and shall contain such terms and conditions as the
Board shall deem appropriate. All Options shall be separately designated
Incentive Stock Options or Nonstatutory Stock Options at the time of grant and,
if certificates are issued, a separate certificate or certificates shall be
issued for shares of Common Stock purchased on exercise of each type of Option.
If an Option is not specifically designated as an Incentive Stock Option, then
the Option shall be a Nonstatutory Stock Option. The provisions of separate
Options need not be identical; provided, however, that
each Option Agreement shall include (through incorporation of provisions hereof
by reference in the Option Agreement or otherwise) the substance of each of the
following provisions:
(a) Term. No Option
shall be exercisable after the expiration of ten (10) years from the date of its
grant or such shorter period specified in the Option
Agreement. Options held by Ten Percent Stockholders shall not be
exercisable after the expiration of five (5) years from the date of grant or
such shorter period specified in the Option Agreement, pursuant to Section
4(b).
(b) Exercise Price. The
initial exercise price of each Option shall be not less than one hundred percent
(100%) of the Fair Market Value of the Common Stock subject to the Option on the
date the Option is granted. Options held by Ten Percent Stockholders
shall not be less than one hundred ten percent (110%) of the Fair Market Value
of Common Stock subject to the Option on the date the Option is granted,
pursuant to Section 4(b). Notwithstanding the foregoing, an Option
may be granted with an exercise price lower than one hundred percent (100%) of
the Fair Market Value of the Common Stock subject to the Option if such Option
granted pursuant to an assumption of or substitution for another option pursuant
to a Corporate Transaction and in a manner consistent with the provisions of
Sections 409A and, if applicable, 424(a) of the Code.
(c) Purchase Price for
Options. The
purchase price of Common Stock acquired pursuant to the exercise of an Option
shall be paid, to the extent permitted by applicable law and as determined by
the Board in its sole discretion, by any combination of the methods of payment
set forth below. The Board shall have the authority to grant Options
that do not permit all of the following methods of payment (or otherwise
restrict the ability to use certain methods) and to grant Options that require
the consent of the Company to utilize a particular method of
payment. The permitted methods of payment are as
follows:
(i) by cash,
check, bank draft or money order payable to the Company;
(ii) pursuant
to a program developed under Regulation T as promulgated by the Federal Reserve
Board that, prior to the issuance of Common Stock, results in either the receipt
of cash (or check) by the Company or the receipt of irrevocable instructions to
pay the aggregate exercise price to the Company from the sales proceeds;
(iii) by
delivery to the Company (either by actual delivery or attestation) of shares of
Common Stock;
(iv) if the
option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant
to which the Company will reduce the number of shares of Common Stock issuable
upon exercise by the largest whole number of shares with a Fair Market Value
that does not exceed the aggregate exercise price; provided, however, that the
Company shall accept a cash or other payment from the Participant to the extent
of any remaining balance of the aggregate exercise price not satisfied by such
reduction in the number of whole shares to be issued; provided, further, that
shares of Common Stock will no longer be subject to an Option and will not be
exercisable thereafter to the extent that (A) shares issuable upon exercise are
reduced to pay the exercise price pursuant to the “net exercise,” (B) shares are
delivered to the Participant as a result of such exercise, and (C) shares are
withheld to satisfy tax withholding
obligations; or
(v) in any
other form of legal consideration that may be acceptable to the Board.
(d) Transferability of
Options. The
Board may, in its sole discretion, impose such limitations on the
transferability of Options as the Board shall determine. In the absence of such
a determination by the Board to the contrary, the following restrictions on the
transferability of Options shall apply:
(i) Restrictions on
Transfer. An
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; provided, however, that
the Board may, in its sole discretion, permit transfer of the Option in a manner
consistent with applicable tax and securities laws upon the Optionholder’s
request. Except as explicitly provide herin, an Option may not be
transferred for consideration.
(ii) Domestic Relations
Orders.
Notwithstanding the foregoing, an Option may be transferred pursuant to a
domestic relations order; provided,
however, that if an Option is an Incentive Stock Option, such Option may
be deemed to be a Nonstatutory Stock Option as a result of such
transfer.
(iii) Beneficiary
Designation. Notwithstanding
the foregoing, the Optionholder may, by delivering written notice to the
Company, in a form provided by or otherwise satisfactory to the Company and any
broker designated by the Company to effect Option exercises, designate a third
party who, in the event of the death of the Optionholder, shall thereafter be
entitled to exercise the Option and receive the Common Stock or other
consideration resulting from such exercise. In the absence of such a
designation, the executor or administrator of the Optionholder’s estate shall be
entitled to exercise the Option and receive the Common Stock or other
consideration resulting from such exercise.
(e) Vesting Generally. The total
number of shares of Common Stock subject to an Option may vest and therefore
become exercisable in periodic installments that may or may not be
equal. The Option may be subject to such other terms and conditions
on the time or times when it may or may not be exercised (which may be based on
the satisfaction of Performance Goals or other criteria) as the Board may deem
appropriate. The vesting provisions of individual Options may
vary. The provisions of this Section 5(e) are subject to any
Option provisions governing the minimum number of shares of Common Stock as to
which an Option may be exercised.
(f) Termination of Continuous
Service. Except as
otherwise provided in the applicable Option Agreement or other agreement between
the Optionholder and the Company, if an Optionholder’s Continuous Service
terminates (other than for Cause or upon the Optionholder's death or
Disability), the Optionholder may exercise his or her Option (to the extent that
the Optionholder was entitled to exercise such Option as of the date of
termination of Continuous Service) but only within such period of time ending on
the earlier of (i) the date three (3) months following the termination of the
Optionholder’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 of Continuous
Service, the Optionholder does not exercise his or her Option within the time
specified herein or in the Option Agreement (as applicable), the Option shall
terminate.
(g) Extension of Termination
Date. An
Optionholder’s Option Agreement may provide that if the exercise of the Option
following the termination of the Optionholder’s Continuous Service (other than
for Cause or upon the Optionholder’s death or Disability) would be prohibited at
any time solely because the issuance of shares of Common Stock would violate the
registration requirements under the Securities Act, then the Option shall
terminate on the earlier of (i) the expiration of a period of three (3) months
after the termination of the Optionholder’s Continuous Service during which the
exercise of the Option would not be in violation of such registration
requirements, or (ii) the expiration of the term of the Option as set forth in
the Option Agreement. In addition, unless otherwise provided in a
Optionholder’s Option Agreement, if the sale of any Common Stock received upon
exercise of an Option following the termination of the Optionholder’s Continuous
Service (other than for Cause) would violate the Company’s insider trading
policy, then the Option shall terminate on the earlier of (i) the expiration of
a period equal to the applicable post-termination exercise period after the
termination of the Optionholder’s Continuous Service during which the exercise
of the Option would not be in violation of the Company’s insider trading policy,
or (ii) the expiration of the term of the Option as set forth in the Option
Agreement.
(h) Disability of
Optionholder. Except as
otherwise provided in the Option Agreement or other agreement between the
Optionholder and the Company, if an Optionholder’s Continuous Service terminates
as a result of the Optionholder’s Disability, the Optionholder may exercise his
or her Option (to the extent that the Optionholder was entitled to exercise such
Option as of the date of termination of Continuous Service), but only within
such period of time ending on the earlier of (i) the date twelve (12) months
following such termination of 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 of Continuous Service, the Optionholder does not exercise his or her
Option within the time specified herein or in the Option Agreement, the Option
shall terminate.
(i) Death of
Optionholder. Except as
otherwise provided in the Option or other agreement between the Optionholder and
the Company, if (i) an Optionholder’s Continuous Service terminates as a result
of the Optionholder’s death, or (ii) the Optionholder dies within the period (if
any) specified in the Option Agreement after the termination of the
Optionholder’s Continuous Service for a reason other than death, then the Option
may be exercised (to the extent the Optionholder was entitled to exercise such
Option as of the date of death) by the Optionholder’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 Optionholder’s death, 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, after the Optionholder’s death,
the Option is not exercised within the time specified herein or in the Option
Agreement, the Option shall terminate.
(j) Termination for
Cause. Except as
explicitly provided otherwise in an Optionholder’s Option Agreement, if an
Optionholder’s Continuous Service is terminated for Cause, the Option shall
terminate upon the date on which the event giving rise to the termination
occurred, and the Optionholder shall be prohibited from exercising his or her
Option from and after the time of such termination of Continuous
Service.
(k) Non-Exempt
Employees. No Option
granted to an Employee who is a non-exempt employee for purposes of the Fair
Labor Standards Act of 1938, as amended, shall be first exercisable for any
shares of Common Stock until at least six (6) months following the date of grant
of the Option. Notwithstanding the foregoing, consistent with the provisions of
the Worker Economic Opportunity Act, (i) in the event of the Optionholder’s
death or Disability, (ii) upon a Corporate Transaction in which such Option is
not assumed, continued, or substituted, (iii) upon a Change in Control, or (iv)
upon the Optionholder’s retirement (as such term may be defined in the
Optionholder’s Option Agreement or in another applicable agreement or in
accordance with the Company's then current employment policies and guidelines),
any such vested Options may be exercised earlier than six (6) months following
the date of grant. The foregoing provision is intended to operate so
that any income derived by a non-exempt employee in connection with the exercise
or vesting of an Option will be exempt from his or her regular rate of
pay.
(l) Early Exercise. The
Option may, but need not, include a provision whereby the Optionholder may elect
at any time before the Optionholder’s Continuous Service terminates to exercise
the Option as to any part or all of the shares of Common Stock subject to the
Option prior to the full vesting of the Option. Any unvested shares
of Common Stock so purchased may be subject to a repurchase option in favor of
the Company or to any other restriction the Board determines to be
appropriate. The Company will not exercise its repurchase option
until at least six (6) months (or such longer or shorter period of time required
to avoid a charge to earnings for financial accounting purposes) have elapsed
following exercise of the Option unless the Board otherwise specifically
provides in the Option.
6. PROVISIONS OF STOCK AWARDS OTHER THAN
OPTIONS.
(a) Restricted Stock
Awards. Each
Restricted Stock Award Agreement shall be in such form and shall contain such
terms and conditions as the Board shall deem appropriate. To the
extent consistent with the Company’s Bylaws, at the
Board’s election, shares of Common Stock may be (x) held in book entry form
subject to the Company’s instructions until any restrictions relating to the
Restricted Stock Award lapse; or (y) evidenced by a certificate, which
certificate shall be held in such form and manner as determined by the Board.
The terms and conditions of Restricted Stock Award Agreements may change from
time to time, and the terms and conditions of separate Restricted Stock Award
Agreements need not be identical, provided, however, that
each Restricted Stock Award Agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:
(i) Consideration. A
Restricted Stock Award may be awarded in consideration for (A) cash, check, bank
draft or money order payable to the Company, (B) past or future services
actually rendered to the Company or an Affiliate, or (C) any other form of legal
consideration that may be acceptable to the Board in its sole discretion and
permissible under applicable law.
(ii) Vesting. Shares
of Common Stock awarded under the Restricted Stock Award Agreement may be
subject to forfeiture to the Company in accordance with a vesting schedule to be
determined by the Board.
(iii) Termination of Participant’s
Continuous Service. If a
Participant’s Continuous Service terminates, the Company may receive through a
forfeiture condition, or a repurchase right any or all of the shares of Common
Stock held by the Participant that have not vested as of the date of termination
of Continuous Service under the terms of the Restricted Stock Award
Agreement.
(iv) Transferability. Rights
to acquire shares of Common Stock under the Restricted Stock Award Agreement
shall be transferable by the Participant only upon such terms and conditions as
are set forth in the Restricted Stock Award Agreement, as the Board shall
determine in its sole discretion, so long as Common Stock awarded under the
Restricted Stock Award Agreement remains subject to the terms of the Restricted
Stock Award Agreement.
(b) Restricted Stock Unit Awards.
Each
Restricted Stock Unit Award Agreement shall be in such form and shall contain
such terms and conditions as the Board shall deem appropriate. The terms and
conditions of Restricted Stock Unit Award Agreements may change from time to
time, and the terms and conditions of separate Restricted Stock Unit Award
Agreements need not be identical; provided, however,
that each
Restricted Stock Unit Award Agreement shall confirm to (through
incorporation of the provisions hereof by reference in the Agreement or
otherwise) the substance of each of the following provisions:
(i) Consideration. At the
time of grant of a Restricted Stock Unit Award, the Board will determine the
consideration, if any, to be paid by the Participant upon delivery of each share
of Common Stock subject to the Restricted Stock Unit Award. The consideration to
be paid (if any) by the Participant for each share of Common Stock subject to a
Restricted Stock Unit Award may be paid in any form of legal consideration that
may be acceptable to the Board in its sole discretion and permissible under
applicable law.
(ii) Vesting. At the
time of the grant of a Restricted Stock Unit Award, the Board may impose such
restrictions or conditions to the vesting of the Restricted Stock Unit Award as
it, in its sole discretion, deems appropriate.
(iii) Payment. A
Restricted Stock Unit Award may be settled by the delivery of shares of Common
Stock, their cash equivalent, any combination thereof or in any other form of
consideration, as determined by the Board and contained in the Restricted Stock
Unit Award Agreement.
(iv) Additional Restrictions.
At the
time of the grant of a Restricted Stock Unit Award, the Board, as it deems
appropriate, may impose such restrictions or conditions that delay the delivery
of the shares of Common Stock (or their cash equivalent) subject to a Restricted
Stock Unit Award to a time after the vesting of such Restricted Stock Unit
Award.
(v) Dividend Equivalents.
Dividend
equivalents may be credited in respect of shares of Common Stock covered by a
Restricted Stock Unit Award, as determined by the Board and contained in the
Restricted Stock Unit Award Agreement. At the sole discretion of the Board, such
dividend equivalents may be converted into additional shares of Common Stock
covered by the Restricted Stock Unit Award in such manner as determined by the
Board. Any additional shares covered by the Restricted Stock Unit Award credited
by reason of such dividend equivalents will be subject to all the terms and
conditions of the underlying Restricted Stock Unit Award Agreement to which they
relate.
(vi) Termination of Participant’s
Continuous Service. Except as
otherwise provided in the applicable Restricted Stock Unit Award Agreement, such
portion of the Restricted Stock Unit Award that has not vested will be forfeited
upon the Participant’s termination of Continuous Service.
(c) Stock Appreciation Rights.
Each
Stock Appreciation Right Agreement shall be in such form and shall contain such
terms and conditions as the Board shall deem appropriate. Stock Appreciation
Rights may be granted as stand-alone Stock Awards or in tandem with other Stock
Awards. The terms and conditions of Stock Appreciation Right Agreements may
change from time to time, and the terms and conditions of separate Stock
Appreciation Right Agreements need not be identical; provided, however, that
each Stock Appreciation Right Agreement shall include (through incorporation of
the provisions hereof by reference in the Agreement or otherwise) the substance
of each of the following provisions:
(i) Term. No Stock
Appreciation Right shall be exercisable after the expiration of ten (10) years
from the date of its grant or such shorter period specified in the Stock
Appreciation Right Agreement.
(ii) Strike Price. Each
Stock Appreciation Right will be denominated in shares of Common Stock
equivalents. The strike price of each Stock Appreciation Right granted as a
stand-alone or tandem Stock Award shall not be less than one hundred percent
(100%) of the Fair Market Value of the Common Stock equivalents subject to the
Stock Appreciation Right on the date of grant.
(iii) Calculation of
Appreciation. The
appreciation distribution payable on the exercise of a Stock Appreciation Right
will be not greater than an amount equal to the excess of (A) the aggregate Fair
Market Value (on the date of the exercise of the Stock Appreciation Right) of a
number of shares of Common Stock equal to the number of shares of Common Stock
equivalents in which the Participant is vested under such Stock Appreciation
Right, and with respect to which the Participant is exercising the Stock
Appreciation Right on such date, over (B) the strike price that will be
determined by the Board at the time of grant of the Stock Appreciation Right.
(iv) Vesting. At the
time of the grant of a Stock Appreciation Right, the Board may impose such
restrictions or conditions to the vesting of such Stock Appreciation Right as
it, in its sole discretion, deems appropriate.
(v) Exercise. To
exercise any outstanding Stock Appreciation Right, the Participant must provide
written notice of exercise to the Company in compliance with the provisions of
the Stock Appreciation Right Agreement evidencing such Stock Appreciation Right.
(vi) Payment. The
appreciation distribution in respect to a Stock Appreciation Right may be paid
in Common Stock, in cash, in any combination of the two or in any other form of
consideration, as determined by the Board and contained in the Stock
Appreciation Right Agreement evidencing such Stock Appreciation Right. An
appreciation distribution in respect to a Stock Appreciation Right that is paid
in a form of consideration other than Common Stock shall not reduce the share
reserve.
(vii) Termination of Continuous
Service. In the
event that a Participant’s Continuous Service terminates (other than for Cause),
the Participant may exercise his or her Stock Appreciation Right (to the extent
that the Participant was entitled to exercise such Stock Appreciation Right as
of the date of termination) but only within such period of time ending on the
earlier of (A) the date three (3) months following the termination of the
Participant’s Continuous Service (or such longer or shorter period specified in
the Stock Appreciation Right Agreement), or (B) the expiration of the term of
the Stock Appreciation Right as set forth in the Stock Appreciation Right
Agreement. If, after termination, the Participant does not exercise his or her
Stock Appreciation Right within the time specified herein or in the Stock
Appreciation Right Agreement (as applicable), the Stock Appreciation Right shall
terminate.
(viii) Termination for
Cause. Except
as explicitly provided otherwise in an Participant’s Stock Appreciation Right
Agreement, in the event that a Participant’s Continuous Service is terminated
for Cause, the Stock Appreciation Right shall terminate upon the termination
date of such Participant’s Continuous Service, and the Participant shall be
prohibited from exercising his or her Stock Appreciation Right from and after
the time of such termination of Continuous Service.
(d) Performance Awards.
(i) Performance Stock
Awards. A
Performance Stock Award is a Stock Award that may vest or may be exercised
contingent upon the attainment during a Performance Period of certain
Performance Goals. A Performance Stock Award may, but need not,
require the completion of a specified period of Continuous Service. The length
of any Performance Period, the Performance Goals to be achieved during the
Performance Period, and the measure of whether and to what degree such
Performance Goals have been attained shall be conclusively determined by the
Committee in its sole discretion. The maximum number of shares to be
received by any Participant in any calendar year attributable to Stock Awards
described in this Section 6(d)(i) (whether the grant, vesting, or exercise is
contingent upon the attainment during a Performance Period of the Performance
Goals) shall not exceed four hundred thirty-four thousand eight hundred seven
(434,807) shares of Common Stock. The
Board may provide for or, subject to such terms and conditions as the Board may
specify, may permit a Participant to elect for, the payment of any Performance
Stock Award to be deferred to a specified date or event. In addition,
to the extent permitted by applicable law and the applicable Award Agreement,
the Board may determine that cash may be used in payment of Performance Stock
Awards.
(ii) Performance Cash
Awards. A
Performance Cash Award is a cash award that may be paid contingent upon the
attainment during a Performance Period of certain Performance
Goals. A Performance Cash Award may also require the completion of a
specified period of Continuous Service. At the time of grant of a
Performance Cash Award, the length of any Performance Period, the Performance
Goals to be achieved during the Performance Period, and the measure of whether
and to what degree such Performance Goals have been attained shall be
conclusively determined by the Committee in its sole
discretion. In any calendar year, the
Committee may not grant a Performance Cash Award that has a maximum
value that may be paid to any Participant in excess of five million dollars
($5,000,000). The Board may provide
for or, subject to such terms and conditions as the Board may specify, may
permit a Participant to elect for, the payment of any Performance Cash Award to
be deferred to a specified date or event. The Committee may specify
the form of payment of Performance Cash Awards, which may be cash or other
property, or may provide for a Participant to have the option for his or her
Performance Cash Award, or such portion thereof as the Board may specify, to be
paid in whole or in part in cash or other property.
(e) Section 162 (m)
Compliance. Unless otherwise permitted in compliance with the
requirements of Section 162(m) of the Code with respect to an Award intended to
qualify as “performance-based compensation” thereunder, the Committee shall
establish the Performance Goals applicable to, and the formula for calculating
the amount payable under, the Award no later than the earlier of (a) the date
ninety (90) days after the commencement of the applicable Performance Period, or
(b) the date on which twenty-five (25%) of the Performance Period has elapsed,
and in any event at a time when the achievement of the applicable Performance
Goals remains substantially uncertain. Prior to the payment of any
compensation under an Award intended to qualify as “performance-based
compensation” under Section 162(m) of the Code, the Committee shall certify the
extent to which any Performance Goals and any other material terms under such
Award have been satisfied (other than in cases where such relate solely to the
increase in the value of the Common Stock). Notwithstanding satisfaction of any
completion of any Performance Goals, to the extent specified at the time of
grant of an Award to “covered employees” within the meaning of Section 162(m) of
the Code, the number of Shares, Options, cash or other benefits granted, issued,
retainable and/or vested under an Award on account of satisfaction of such
Performance Goals may be reduced by the Committee on the basis of such further
considerations as the Committee, in its sole discretion, shall
determine.
(f) Other Stock Awards. Other
forms of Stock Awards valued in whole or in part by reference to, or otherwise
based on, Common Stock, including the appreciation
in value thereof (e.g., options or stock rights with an exercise price or strike
price less than 100% of the Fair Market Value of the Common Stock at the time of
grant) may be granted either alone or in addition to Stock Awards
provided for under Section 5 and the preceding provisions of this Section
6. Subject to the provisions of the Plan, the Board shall have sole
and complete authority to determine the persons to whom and the time or times at
which such Other Stock Awards will be granted, the number of shares of Common
Stock (or the cash equivalent thereof) to be granted pursuant to such Other
Stock Awards and all other terms and conditions of such Other Stock Awards.
7. COVENANTS OF THE
COMPANY.
(a) Availability of
Shares. During
the terms of the Stock Awards, the Company shall keep available at all times the
number of shares of Common Stock required to satisfy such Stock
Awards.
(b) Securities Law
Compliance. The
Company shall seek to obtain from each regulatory commission or agency having
jurisdiction over the Plan such authority as may be required to grant Stock
Awards and to issue and sell shares of Common Stock upon exercise of the Stock
Awards; provided,
however, that this undertaking shall not require the Company to register
under the Securities Act the Plan, any Stock Award or any Common 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 that counsel for the Company deems necessary for the lawful
issuance and sale of Common Stock under the Plan, the Company shall be relieved
from any liability for failure to issue and sell Common Stock upon exercise of
such Stock Awards unless and until such authority is obtained. A Participant shall not be eligible for the grant of a
Stock Award or the subsequent issuance of Common Stock pursuant to the Stock
Award if such grant or issuance would be in violation of any applicable
securities law.
(c) No Obligation to Notify or Minimize
Taxes. The Company shall have no duty or obligation to any
Participant to advise such holder as to the time or manner of exercising such
Stock Award. Furthermore, the Company shall have no duty or
obligation to warn or otherwise advise such holder of a pending termination or
expiration of a Stock Award or a possible period in which the Stock Award may
not be exercised. The Company has no duty or obligation to minimize
the tax consequences of a Stock Award to the holder of such Stock
Award.
8. MISCELLANEOUS.
(a) Use of Proceeds from Sales of Common
Stock. Proceeds
from the sale of shares of Common Stock pursuant to Stock Awards shall
constitute general funds of the Company.
(b) Corporate Action Constituting Grant
of Stock Awards. Corporate
action constituting a grant by the Company of a Stock Award to any Participant
shall be deemed completed as of the date of such corporate action, unless
otherwise determined by the Board, regardless of when the instrument,
certificate, or letter evidencing the Stock Award is communicated to, or
actually received or accepted by the Participant.
(c) Stockholder
Rights. No
Participant shall be deemed to be the holder of, or to have any of the rights of
a holder with respect to, any shares of Common Stock subject to such Stock Award
unless and until (i) such Participant has satisfied all requirements for
exercise of the Stock Award pursuant to its terms, if applicable, and (ii) the issuance of the Common Stock subject to
such Stock Award has been entered into the books and records of the
Company.
(d) No Employment or Other Service
Rights. Nothing
in the Plan, any Stock Award Agreement or any other instrument executed
thereunder or in connection with any 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.
(e) Incentive Stock Option $100,000
Limitation. To the
extent that the aggregate Fair Market Value (determined at the time of grant) of
Common Stock with respect to which Incentive Stock Options are exercisable for
the first time by any Optionholder during any calendar year (under all plans of
the Company and any Affiliates) exceeds one hundred thousand dollars ($100,000),
the Options or portions thereof that exceed such limit (according to the order
in which they were granted) shall be treated as Nonstatutory Stock Options,
notwithstanding any contrary provision of the applicable Option
Agreement(s).
(f) Investment
Assurances. The
Company may require a Participant, as a condition of exercising or acquiring
Common Stock under any Stock Award, (i) to give written assurances satisfactory
to the Company as to the Participant’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 representative, the merits and risks of exercising
the Stock Award; and (ii) to give written assurances satisfactory to the Company
stating that the Participant is acquiring Common Stock subject to the Stock
Award for the Participant’s own account and not with any present intention of
selling or otherwise distributing the Common Stock. The foregoing
requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (A) the issuance of the shares upon the exercise or acquisition
of Common Stock under the Stock Award has been registered under a then currently
effective registration statement under the Securities Act, or (B) 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 Common Stock.
(g) Withholding
Obligations. Unless prohibited by the terms of a Stock Award
Agreement, the Company may, in its sole discretion, satisfy any federal, state
or local tax withholding obligation relating to an Award by any of the following means or by a
combination of such means: (i) causing the Participant to tender a cash payment;
(ii) withholding shares of Common Stock from the shares of Common
Stock issued or otherwise issuable to the Participant in connection with the
Award; provided, however, that no shares of Common Stock are withheld with a value
exceeding the minimum amount of tax required to be withheld by law (or such
lesser amount as may be necessary to avoid classification of the Stock Award as
a liability for financial accounting purposes); (iii) withholding cash from an
Award settled in cash; (iv) withholding payment from any amounts otherwise
payable to the Participant; or (v) by such other method as may be set
forth in the Award Agreement.
(h) Electronic
Delivery. Any
reference herein to a “written” agreement or document shall include any
agreement or document delivered electronically or posted on the Company’s
intranet.
(i) Deferrals. To the
extent permitted by applicable law, the Board, in its sole discretion, may
determine that the delivery of Common Stock or the payment of cash, upon the
exercise, vesting or settlement of all or a portion of any Award may be deferred
and may establish programs and procedures for deferral elections to be made by
Participants. Deferrals by Participants will be made in accordance
with Section 409A of the Code. Consistent with Section 409A of the Code, the
Board may provide for distributions while a Participant is still an employee or
otherwise providing services to the Company. The Board is authorized
to make deferrals of Awards and determine when, and in what annual percentages,
Participants may receive payments, including lump sum payments, following the
Participant’s termination of Continuous Service, and implement such other terms
and conditions consistent with the provisions of the Plan and in accordance with
applicable law.
(j) Compliance with
409A. To the
extent that the Board determines that any Award granted hereunder is subject to Section 409A of the Code,
the Award Agreement evidencing such Award shall incorporate the terms and
conditions necessary to avoid the consequences specified in
Section 409A(a)(1) of the
Code. To the extent applicable, the Plan and Award Agreements shall
be interpreted in accordance with Section 409A of the Code. Notwithstanding
any provision of the Plan to the contrary, in the event that following the
Effective Date the Board determines that any Award may be subject to Section
409A of the Code), the Board may adopt such amendments to the Plan and the
applicable Award Agreement or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or take any other
actions, that the Board determines are necessary or appropriate to (i) exempt
the Award from Section 409A of the Code and/or preserve the intended tax
treatment of the benefits provided with respect to the Award, or (ii) comply
with the requirements of Section 409A of the Code. Notwithstanding anything to the contrary in this Plan
(and unless the Award Agreement specifically provides otherwise), if the Shares
are publicly traded and a Participant holding an Award that constitutes
“deferred compensation” under Section 409A of the Code is a “specified employee”
for purposes of Section 409A of the Code, no distribution or payment of any
amount shall be made before a date that is six (6) months following the date of
such Participant's “separation from service” (as defined in Section 409A of the
Code without regard to alternative definitions thereunder) or, if earlier, the
date of the Participant's death.
9. ADJUSTMENTS UPON CHANGES IN COMMON
STOCK; OTHER CORPORATE EVENTS.
(a) Capitalization
Adjustments. In the
event of a Capitalization Adjustment, the Board shall appropriately and
proportionately adjust: (i) the class(es) and maximum number of securities
subject to the Plan pursuant to Section 3(a), (ii) the class(es)
and maximum number of securities that may be issued pursuant to the exercise of
Incentive Stock Options pursuant to Section 3(c),
(iii) the class(es) and maximum number of securities that may be awarded to
any person pursuant to Section 4(d) and 6(d)(i), and (iv) the class(es) and number of securities and price per share of
stock subject to outstanding Stock Awards. The Board shall make such
adjustments, and its determination shall be final, binding and
conclusive.
(b) Dissolution or
Liquidation. Except as
otherwise provided in the Stock Award Agreement, in the event of a dissolution
or liquidation of the Company, all outstanding Stock Awards (other than Stock
Awards consisting of vested and outstanding shares of Common Stock not subject
to a forfeiture condition or the Company’s right of repurchase) shall terminate
immediately prior to the completion of such dissolution or liquidation, and the
shares of Common Stock subject to the Company’s repurchase rights or subject to
a forfeiture condition may be repurchased or reacquired by the Company
notwithstanding the fact that the holder of such Stock Award is providing
Continuous Service; provided,
however, that the Board may, in its sole discretion, cause some or all
Stock Awards to become fully vested, exercisable and/or no longer subject to
repurchase or forfeiture (to the extent such Stock Awards have not previously
expired or terminated) before the dissolution or liquidation is completed but
contingent on its completion.
(c) Corporate
Transaction. The
following provisions shall apply to Stock Awards in the event of a Corporate
Transaction unless otherwise provided in the instrument evidencing the Stock
Award or any other written agreement between the Company or any Affiliate and
the Participant or unless otherwise expressly provided by the Board at the time
of grant of a Stock Award.
(i) Stock Awards May Be
Assumed. In the
event of a Corporate Transaction, any surviving corporation or acquiring
corporation (or the surviving or acquiring corporation’s parent company) may
assume or continue any or all Stock Awards outstanding under the Plan or may
substitute similar stock awards for Stock Awards outstanding under the Plan
(including but not limited to, awards to acquire the same consideration paid to
the stockholders of the Company pursuant to the Corporate Transaction), and any
reacquisition or repurchase rights held by the Company in respect of Common
Stock issued pursuant to Stock Awards may be assigned by the Company to the
successor of the Company (or the successor’s parent company, if any), in
connection with such Corporate Transaction. A surviving corporation
or acquiring corporation (or its parent) may choose to assume or continue only a
portion of a Stock Award or substitute a similar stock award for only a portion
of a Stock Award, or may choose to assume or continue the Stock Awards held by
some, but not all Participants. The terms of any assumption,
continuation or substitution shall be set by the Board.
(ii) Stock Awards Held by Current
Participants. In the
event of a Corporate Transaction in which the surviving corporation or acquiring
corporation (or its parent company) does not assume or continue such outstanding
Stock Awards or substitute similar stock awards for such outstanding Stock
Awards, then with respect to Stock Awards that have not been assumed, continued
or substituted and that are held by Participants whose Continuous Service has
not terminated prior to the effective time of the Corporate Transaction
(referred to as the “Current
Participants”), the vesting of such Stock Awards (and, with respect to
Options and Stock Appreciation Rights, the time when such Stock Awards may be
exercised) may in the Board’s sole discretion be accelerated in full to a date
prior to the effective time of such Corporate Transaction (contingent upon the
effectiveness of the Corporate Transaction) as the Board shall determine (or, if
the Board shall not determine such a date, to the date that is five (5) days
prior to the effective time of the Corporate Transaction), and such Stock Awards
shall terminate if not exercised (if applicable) at or prior to the effective
time of the Corporate Transaction, and any reacquisition or repurchase rights
held by the Company with respect to such Stock Awards shall lapse (contingent
upon the effectiveness of the Corporate Transaction).
(iii) Stock Awards Held by Persons other
than Current Participants. In the
event of a Corporate Transaction in which the surviving corporation or acquiring
corporation (or its parent company) does not assume or continue such outstanding
Stock Awards or substitute similar stock awards for such outstanding Stock
Awards, then with respect to Stock Awards that have not been assumed, continued
or substituted and that are held by persons other than Current Participants, the
vesting of such Stock Awards (and, if applicable, the time at which such Stock
Award may be exercised) shall not be accelerated and such Stock Awards (other
than a Stock Award consisting of vested and outstanding shares of Common Stock
not subject to the Company’s right of repurchase) shall terminate if not
exercised (if applicable) prior to the effective time of the Corporate
Transaction; provided,
however, that any reacquisition or repurchase rights held by the Company
with respect to such Stock Awards shall not terminate and may continue to be
exercised notwithstanding the Corporate Transaction.
(iv) Payment for Stock Awards in Lieu of
Exercise. Notwithstanding
the foregoing, in the event a Stock Award will terminate if not exercised prior
to the effective time of a Corporate Transaction, the Board may provide, in its
sole discretion, that the holder of such Stock Award may not exercise such Stock
Award but will receive a payment, in such form as may be determined by the
Board, equal in value, at the effective time, to the excess, if any, of (A) the
value of the property the Participant would have received upon the exercise of
the Stock Award (including, at the discretion of the Board, any unvested portion
of such Stock Award), over (B) any exercise price payable by such holder in
connection with such exercise.
(d) Change in Control. A Stock
Award may be subject to additional acceleration of vesting and exercisability
upon or after a Change in Control as may be provided in the Stock Award
Agreement for such Stock Award or as may be provided in any other written
agreement between the Company or any Affiliate and the Participant, but in the
absence of such provision, no such acceleration shall occur.
10. TERMINATION OR SUSPENSION OF THE
PLAN.
(a) Plan Term. The Plan
shall continue until such time as it is suspended or terminated by the
Board. Notwithstanding the foregoing, the Board may not grant any
Incentive Stock Options after the tenth (10th)
anniversary from the earlier of (i) the date the Plan is adopted by the Board,
or (ii) the date the Plan is approved by the stockholders of the
Company. No Awards may be granted under the Plan while the Plan is
suspended or after it is terminated.
(b) No Impairment of
Rights. Suspension
or termination of the Plan shall not impair rights and obligations under any
Award granted while the Plan is in effect except with the written consent of the
affected Participant.
11. EFFECTIVE DATE OF
PLAN.
This Plan shall become effective on the Effective Date.
12. CHOICE OF LAW.
The law
of the State of California shall govern all questions concerning the
construction, validity and interpretation of this Plan, without regard to such
state’s conflict of laws rules.
13. DEFINITIONS. As used
in the Plan, the following definitions shall apply to the capitalized terms
indicated below:
(a) “Affiliate” means,
at the time of determination, any “parent” or “subsidiary” as such terms are
defined in Rule 405 of the Securities Act. The Board shall have the authority to
determine the time or times at which “parent” or “subsidiary” status is
determined within the foregoing definition.
(b) “Award” means a
Stock Award or a Performance Cash Award.
(c) “Award
Agreement” means a
written agreement between the Company and a Participant evidencing the terms and
conditions of an Award.
(d) “Board” means
the Board of Directors of the Company.
(e) “Capitalization
Adjustment” means any
change that is made in, or other events that occur with respect to, the Common
Stock subject to the Plan or subject to any Stock Award after the Effective Date
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 similar transaction. Notwithstanding the
foregoing, the conversion of any convertible securities of the Company shall not
be treated as a Capitalization Adjustment.
(f) “Cause” shall
have the meaning ascribed to such term in any written agreement between the
Participant and the Company defining such term and, in the absence of such
agreement, such term shall mean, with respect to a Participant, the occurrence
of any of the following events that has a material negative impact on the
business or reputation of the Company: (i) such Participant’s
commission of any felony or any crime involving fraud, dishonesty or moral
turpitude under the laws of the United States or any state thereof; (ii) such
Participant’s attempted commission of, or participation in, a fraud or act of
dishonesty against the Company; (iii) such Participant’s intentional, material
violation of any contract or agreement between the Participant and the Company
or of any statutory duty owed to the Company; (iv) such Participant’s
unauthorized use or disclosure of the Company’s confidential information or
trade secrets; or (v) such Participant’s gross misconduct. The determination
that a termination of the Participant’s Continuous Service is either for Cause
or without Cause shall be made by the Company in its sole
discretion. Any determination by the Company that the Continuous
Service of a Participant was terminated with or without Cause for the purposes
of outstanding Awards held by such Participant shall have no effect upon any
determination of the rights or obligations of the Company or such Participant
for any other purpose.
(g) “Change in
Control” means
the occurrence, in a single transaction or in a series of related transactions,
of any one or more of the following events:
(i) any
Exchange Act Person becomes the Owner, directly or indirectly, of securities of
the Company representing more than fifty percent (50%) of the combined voting
power of the Company’s then outstanding securities other than by virtue of a
merger, consolidation or similar transaction. Notwithstanding the
foregoing, a Change in Control shall not be deemed to occur (A) on account of
the acquisition of securities of the Company directly from the Company, (B) on
account of the acquisition of securities of the Company by an investor, any
affiliate thereof or any other Exchange Act Person that acquires the Company’s
securities in a transaction or series of related transactions the primary
purpose of which is to obtain financing for the Company through the issuance of
equity securities, or (C) solely because the level of Ownership held by any
Exchange Act Person (the “Subject Person”) exceeds the
designated percentage threshold of the outstanding voting securities as a result
of a repurchase or other acquisition of voting securities by the Company
reducing the number of shares outstanding, provided that if a Change in Control
would occur (but for the operation of this sentence) as a result of the
acquisition of voting securities by the Company, and after such share
acquisition, the Subject Person becomes the Owner of any additional voting
securities that, assuming the repurchase or other acquisition had not occurred,
increases the percentage of the then outstanding voting securities Owned by the
Subject Person over the designated percentage threshold, then a Change in
Control shall be deemed to occur;
(ii) there is
consummated a merger, consolidation or similar transaction involving (directly
or indirectly) the Company and, immediately
after the consummation of such merger, consolidation or similar transaction, the
stockholders of the Company immediately prior thereto do not Own, directly or
indirectly, either (A) outstanding voting securities representing more than
fifty percent (50%) of the combined outstanding voting power of the surviving
Entity in such merger, consolidation or similar transaction or (B) more than
fifty percent (50%) of the combined outstanding voting power of the parent of
the surviving Entity in such merger, consolidation or similar transaction, in
each case in substantially the same proportions as their Ownership of the
outstanding voting securities of the Company immediately prior to such
transaction;
(iii) the
stockholders of the Company approve or the Board approves a plan of complete
dissolution or liquidation of the Company, or a complete dissolution or
liquidation of the Company shall otherwise occur, except for a liquidation into
a parent corporation;
(iv) there is
consummated a sale, lease, exclusive
license or other disposition of all or substantially all of the consolidated
assets of the Company and its Subsidiaries, other than a sale, lease, license or
other disposition of all or substantially all of the consolidated assets of the
Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the
combined voting power of the voting securities of which are Owned by
stockholders of the Company in substantially the same proportions as their
Ownership of the outstanding voting securities of the Company immediately prior
to such sale, lease, license or other disposition; or
(v) individuals
who, on the
date the Plan is adopted by the Board, are members of the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the
members of the Board; provided, however, that if
the appointment or election (or nomination for election) of any new Board member
was approved or recommended by a majority vote of the members of the Incumbent
Board then still in office, such new member shall, for purposes of this Plan, be
considered as a member of the Incumbent Board.
Notwithstanding
the foregoing or any other provision of this Plan, (A) the term Change in
Control shall not include a sale of assets, merger or other transaction effected
exclusively for the purpose of changing the domicile of the Company, and (B) the
definition of Change in Control (or any analogous term) in an individual written
agreement between the Company or any Affiliate and the Participant shall
supersede the foregoing definition with respect to Awards subject to such
agreement; provided,
however, that if no definition of Change in Control or any analogous term
is set forth in such an individual written agreement, the foregoing definition
shall apply.
(h) “Code” means
the Internal Revenue Code of 1986, as amended.
(i) “Committee” means a
committee of one (1) or more Directors to whom authority has been delegated by
the Board in accordance with Section 2(c).
(j) “Common
Stock” means
the common stock of the Company.
(k) “Company” means
BroadVision, Inc., a Delaware corporation.
(l) “Consultant”
means any
person, including an advisor, who is (i) engaged by the Company or an Affiliate
to render consulting or advisory services and is compensated for such services,
or (ii) serving as a member of the board of directors of an Affiliate and is
compensated for such services. However, service solely as a Director,
or payment of a fee for such service, shall not cause a Director to be
considered a “Consultant” for purposes of the Plan. Notwithstanding
the foregoing, a person is treated as a Consultant under this Plan only if a
Form S-8 Registration Statement under the Securities Act is available to
register the sale of the Company’s securities to such
person.
(m) “Continuous
Service”
means that the
Participant’s service with the Company or an Affiliate, whether as an Employee,
Director or Consultant, is not interrupted or terminated. A change in
the capacity in which the Participant renders service to the Company or an
Affiliate as an Employee, Consultant or Director 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 service with the Company or an
Affiliate, shall not terminate a Participant’s Continuous Service; provided, however, if the
Entity for which a Participant is rendering services ceases to qualify as an
Affiliate, as determined by the Board, in its sole discretion, such
Participant’s Continuous Service shall be considered to have terminated on the
date such Entity ceases to qualify as an Affiliate. To the extent
permitted by law, 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 (i) any leave of absence approved by the
Board or Chief Executive Officer, including sick leave, military leave or any
other personal leave, or (ii) transfers between the Company, an Affiliate, or
their successors. Notwithstanding the foregoing, a leave of absence
shall be treated as Continuous Service for purposes of vesting in a Stock Award
only to such extent as may be provided in the Company’s leave of absence policy,
in the written terms of any leave of absence agreement or policy applicable to
the Participant, or as otherwise required by law.
(n) “Corporate
Transaction” means
the occurrence, in a single transaction or in a series of related transactions,
of any one or more of the following events:
(i) the
consummation of a sale or other disposition of
all or substantially all, as determined by the Board in its sole discretion, of
the consolidated assets of the Company and its
Subsidiaries;
(ii) the
consummation of a sale or other disposition of at least ninety percent (90%) of
the outstanding securities of the Company;
(iii) the
consummation of a merger, consolidation or similar transaction following which
the Company is not the surviving corporation; or
(iv) the
consummation of a merger, consolidation or similar transaction following which
the Company is the surviving corporation but the shares of Common Stock
outstanding immediately preceding the merger, consolidation or similar
transaction are converted or exchanged by virtue of the merger, consolidation or
similar transaction into other property, whether in the form of securities, cash
or otherwise.
(o) “Covered
Employee” shall
have the meaning provided in Section 162(m)(3) of the Code.
(p) “Director” means a
member of the Board.
(q) “Disability” means,
with respect to a Participant, the inability of such Participant to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than twelve (12) months, as provided in Sections 22(e)(3) and
409A(a)(2)(c)(i) of the Code, and shall be determined by the Board on the basis
of such medical evidence as the Board deems warranted under the
circumstances.
(r) “Effective
Date” means the
effective date of this Plan document, which is the date of the annual meeting of
stockholders of the Company held in 2009 provided this Plan is approved by the
Company’s stockholders at such meeting.
(s) “Employee” means
any person employed by the Company or an Affiliate. However, service solely as a
Director, or payment of a fee for such services, shall not cause a Director to
be considered an “Employee” for purposes of the Plan.
(t) “Entity” means a
corporation, partnership, limited liability company or other
entity.
(u) “Exchange
Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
(v) “Exchange Act
Person” means any
natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d)
of the Exchange Act), except that “Exchange Act Person” shall not include (i)
the Company or any Subsidiary of the Company, (ii) any employee benefit plan of
the Company or any Subsidiary of the Company or any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
Subsidiary of the Company, (iii) an underwriter temporarily holding securities
pursuant to a registered public offering of such securities, (iv) an Entity
Owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their Ownership of stock of the Company;
or (v) any natural person, Entity or “group” (within the meaning of Section
13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the
Owner, directly or indirectly, of securities of the Company representing more
than fifty percent (50%) of the combined voting power of the Company’s then
outstanding securities.
(w) “Fair Market
Value” means,
as of any date, the value of the Common Stock determined as
follows:
(i) If the
Common Stock is listed on any established stock exchange or traded on the NASDAQ
National Market or the NASDAQ SmallCap Market, the Fair Market Value of a share
of Common Stock, unless otherwise determined by the Board, shall be the closing
sales price for such stock as quoted on such exchange or market (or the exchange
or market with the greatest volume of trading in the Common Stock) on the last
market trading day prior to the day of determination, as reported in a source
the Board deems reliable.
(ii) Unless
otherwise provided by the Board, if there is no closing sales price for the
Common Stock on the date of determination, then the Fair Market Value shall be
the closing selling price on the last preceding date for which such quotation
exists.
(iii) In the
absence of such markets for the Common Stock, the Fair Market Value shall be
determined by the Board in good faith and in a manner that complies with Section
409A and 422 of the Code.
(x) “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.
(y) “Non-Employee
Director” means a
Director who either (i) is not a current employee or officer of the Company or
an Affiliate, does not receive compensation, either directly or indirectly, from
the Company or an Affiliate 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 for which
disclosure would be required under Item 404(a) of Regulation S-K, and is not
engaged in a business relationship for which disclosure would be required
pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered
a “non-employee director” for purposes of Rule 16b-3.
(z) “Nonstatutory Stock
Option” means
any option granted pursuant to Section 5 of the Plan that does not qualify
as an Incentive Stock Option.
(aa) “Officer” means a
person who is an officer of the Company within the meaning of Section 16 of
the Exchange Act.
(bb) “Option” means an
Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of
Common Stock granted pursuant to the Plan.
(cc) “Option
Agreement” means a
written agreement between the Company and an Optionholder evidencing the terms
and conditions of an Option grant. Each Option Agreement shall be subject to the
terms and conditions of the Plan.
(dd) “Optionholder” means a
person to whom an Option is granted pursuant to the Plan or, if applicable,
such other person who holds an outstanding Option.
(ee) “Other Stock
Award” means an
award based in whole or in part by reference to the Common Stock that is granted
pursuant to the terms and conditions of Section 6(f).
(ff) “Other Stock Award Agreement”
means a
written agreement between the Company and a holder of an Other Stock Award
evidencing the terms and conditions of an Other Stock Award grant. Each Other
Stock Award Agreement shall be subject to the terms and conditions of the Plan.
(gg) “Outside
Director”
means a
Director 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” who receives compensation for prior services (other
than benefits under a tax-qualified retirement plan) during the taxable year,
has not been an officer of the Company or an “affiliated corporation,” and does
not receive remuneration from the Company or an “affiliated corporation,” either
directly or indirectly, 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.
(hh) “Own,” “Owned,” “Owner,”
“Ownership” A person
or Entity shall be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to
have acquired “Ownership” of securities if such person or Entity, directly or
indirectly, through any contract, arrangement, understanding, relationship or
otherwise, has or shares voting power, which includes the power to vote or to
direct the voting, with respect to such securities.
(ii) “Participant” means a
person to whom an Award is granted pursuant to the Plan or, if applicable, such
other person who holds an outstanding Stock Award.
(jj) “Performance Cash
Award” means an
award of cash granted pursuant to the terms and conditions of Section
6(d)(ii).
(kk) “Performance
Criteria”
means the one
or more criteria that the Board shall select for purposes of establishing the
Performance Goals for a Performance Period. The Performance Criteria
that shall be used to establish such Performance Goals may be based on any one
of, or combination of, the following as determined by the Board: (i) earnings
(including earnings per share and net earnings); (ii) earnings before interest,
taxes and depreciation; (iii) earnings before interest, taxes, depreciation and
amortization; (iv) total stockholder return; (v) return on equity or average
stockholder’s equity; (vi) return on assets, investment, or capital employed;
(vii) stock price; (viii) margin (including gross margin); (ix) income (before
or after taxes); (x) operating income; (xi) operating income after taxes; (xii)
pre-tax profit; (xiii) operating cash flow; (xiv) sales or revenue targets; (xv)
increases in revenue or product revenue; (xvi) expenses and cost reduction
goals; (xvii) improvement in or attainment of working capital levels; (xiii)
economic value added (or an equivalent metric); (xix) market share; (xx) cash
flow; (xxi) cash flow per share; (xxii) share price performance; (xxiii) debt
reduction; (xxiv) implementation or completion of projects or processes; (xxv)
customer satisfaction; (xxvi) stockholders’ equity; (xxvii) capital
expenditures; (xxiii) debt levels; (xxix) operating profit or net operating
profit; (xxx) workforce diversity; (xxxi) growth of net income or operating
income; (xxxii) billings; and (xxxiii) to the extent that an Award is not
intended to comply with Section 162(m) of the Code, other measures of
performance selected by the Board.
(ll) “Performance
Goals”
means, for a
Performance Period, the one or more goals established by the Board for the
Performance Period based upon the Performance Criteria. Performance
Goals may be based on a Company-wide basis, with respect to one or more business
units, divisions, Affiliates, or business segments, and in either absolute terms
or relative to the performance of one or more comparable companies or the
performance of one or more relevant indices. At the time of the grant
of any Award, the Board is authorized to determine whether, when calculating the
attainment of Performance Goals for a Performance Period: (i) to exclude
restructuring and/or other nonrecurring charges; (ii) to exclude exchange rate
effects, as applicable, for non-U.S. dollar denominated Performance Goals; (iii)
to exclude the effects of changes to generally accepted accounting principles;
(iv) to exclude the effects of any statutory adjustments to corporate tax rates;
and (v) to exclude the effects of any “extraordinary items” as determined under
generally accepted accounting principles. In addition, the Board
retains the discretion to reduce or eliminate the compensation or economic
benefit due upon attainment of Performance Goals and to define the manner of calculating the
Performance Criteria it selects to use for such Performance Period.
Partial achievement of the specified criteria may result in the payment
or vesting corresponding to the degree of achievement as specified in the Stock
Award Agreement or the written terms of a Performance Cash
Award.
(mm) “Performance
Period” means
the period of time selected by the Board over which the attainment of one or
more Performance Goals will be measured for the purpose of determining a
Participant’s right to and the payment of a Stock Award or a Performance Cash
Award. Performance Periods may be of varying and overlapping duration, at the
sole discretion of the Board.
(nn) “Performance Stock
Award” means a
Stock Award granted under the terms and conditions of Section
6(d)(i).
(oo) “Plan” means
this BroadVision, Inc. Amended and Restated 2006 Equity Incentive
Plan.
(pp) “Restricted Stock
Award” means an
award of shares of Common Stock that is granted pursuant to the terms and
conditions of Section 6(a).
(qq) “Restricted Stock Award
Agreement” means a
written agreement between the Company and a holder of a Restricted Stock Award
evidencing the terms and conditions of a Restricted Stock Award grant. Each
Restricted Stock Award Agreement shall be subject to the terms and conditions of
the Plan.
(rr) “Restricted Stock Unit Award”
means a
right to receive shares of Common Stock that is granted pursuant to the terms
and conditions of Section 6(b).
(ss) “Restricted Stock Unit Award
Agreement” means a
written agreement between the Company and a holder of a Restricted Stock Unit
Award evidencing the terms and conditions of a Restricted Stock Unit Award
grant. Each Restricted Stock Unit Award Agreement shall be subject to the terms
and conditions of the Plan.
(tt) “Rule
16b-3” means
Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as
in effect from time to time.
(uu) “Securities
Act” means
the Securities Act of 1933, as amended.
(vv) “Stock Appreciation
Right” or "SAR" means a right to
receive the appreciation on Common Stock that is granted pursuant to the terms
and conditions of Section 5.
(ww) “Stock Appreciation Right
Agreement” means a
written agreement between the Company and a holder of a Stock Appreciation Right
evidencing the terms and conditions of a Stock Appreciation Right grant. Each
Stock Appreciation Right Agreement shall be subject to the terms and conditions
of the Plan.
(xx) “Stock
Award” means
any
right to receive Common Stock granted under the Plan, including an Incentive
Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, a
Restricted Stock Unit Award, a Stock Appreciation Right, a Performance Stock
Award or any Other Stock Award.
(yy) “Stock Award
Agreement” means a
written agreement between the Company and a Participant evidencing the terms and
conditions of a Stock Award grant. Each Stock Award Agreement shall be subject
to the terms and conditions of the Plan.
(zz) “Subsidiary” means,
with
respect to the Company, (i) any corporation of which more than fifty percent
(50%) of the outstanding capital stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether,
at the time, stock of any other class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at
the time, directly or indirectly, Owned by the Company, and (ii) any
partnership, limited liability company or other entity in which the Company has
a direct or indirect interest (whether in the form of voting or participation in
profits or capital contribution) of more than fifty percent
(50%).
(aaa) “Ten Percent
Stockholder” means a
person who 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 any Affiliate.
BROADVISION, INC.
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Mark
this box with an X if you have made changes to your name or address
details above.
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ANNUAL MEETING PROXY
CARD
A. Election of
Directors.
1.
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To
elect directors to serve for the ensuing year and until their successors
are elected. The Board of Directors recommends a vote FOR the following
nominees:
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For
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Withhold
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For
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Withhold
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01-Pehong
Chen
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¨
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¨
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03-Robert
Lee
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¨
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¨
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02-
James D. Dixon
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¨
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04-François
Stieger
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B. Proposals.
The Board
of Directors recommends a vote FOR the following proposals:
2.
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To
ratify the selection by the Audit Committee of the Board of Directors of
Odenberg, Ullakko, Muranishi & Co. LLP as our
independent registered public accounting firm for our fiscal
year ending December 31, 2009.
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For
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Against
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Abstain
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3.
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To
approve the Amended and Restated BroadVision, Inc. 2006 Equity
Incentive Plan to, among other things, (i) provide the Board with
additional flexibility to approve and effect repricings, exchanges and
similar transactions without seeking additional stockholder approval, (ii)
increase the aggregate number of shares authorized for issuance under the
Plan by 174,807 shares and (iii) to include an "evergreen" provision
in the Plan that provides for automatic annual increases in the number of
shares authorized for issuance.
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For
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Against
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Abstain
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C. Authorized Signatures-Sign Here-This
section must be completed for your instructions to be
executed.
NOTE:
Please sign your name(s) EXACTLY as your name(s) appear(s) on this proxy. All
joint holders must sign. When signing as attorney, trustee, executor,
administrator, guardian or corporate officer, please provide your FULL
title.
Signature
1--Please keep signature within the box
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Date
(mm/dd/yyyy)
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BROADVISION, INC.
PROXY SOLICITED BY THE BOARD OF
DIRECTORS
FOR THE ANNUAL MEETING OF
STOCKHOLDERS
TO BE HELD ON APRIL 30,
2009
The
undersigned hereby appoints Pehong Chen as attorney and proxy of the
undersigned, with full power of substitution, to vote all of the shares of stock
of BroadVision, Inc., a Delaware corporation (the “Company”), which the
undersigned may be entitled to vote at the Annual Meeting of Stockholders of the
Company to be held at the Company’s headquarters located at 1600 Seaport
Boulevard, Suite 550, North Building, Redwood City, California 94063 on
Thursday, April 30, 2009, at 10:00 a.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, with
discretionary authority as to any and all other matters that may properly come
before the meeting.
UNLESS
A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR ALL NOMINEES
LISTED IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3, 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 THE NOMINEES FOR DIRECTOR LISTED IN PROPOSAL
1 AND A VOTE FOR PROPOSALS 2 AND 3.