<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Primix Solutions 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):
/X/ 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:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / 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.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
PRIMIX SOLUTIONS INC.
ONE ARSENAL MARKETPLACE
WATERTOWN, MA 02472
June 3, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Primix Solutions Inc. (the "Company") to be held on Friday, June 25, 1999, at
1:00 p.m. eastern time, at Exchange Place, 53 State Street, Boston, MA 02109
(the "Annual Meeting").
The Annual Meeting has been called for the purpose of (i) electing one Class
III Director for a three-year term, (ii) amending the Company's 1996 Stock Plan
to increase the authorized number of shares of the Company's Common Stock to be
issued thereunder from 1,745,867 to 3,500,000, and (iii) considering and voting
upon such other business as may properly come before the Annual Meeting or any
adjournments or postponements thereof.
The Board of Directors has fixed the close of business on May 6, 1999 as the
record date for the determination of stockholders entitled to notice of, and to
vote at, the Annual Meeting and any adjournments or postponements thereof.
The Board of Directors of the Company recommends that you vote "FOR" the
election of the nominee of the Board of Directors as a Director of the Company
and "FOR" the proposed amendment to the 1996 Stock Plan to increase the number
of authorized shares thereunder.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU ARE A
STOCKHOLDER OF RECORD AND YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON,
EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
Sincerely,
/s/ Lennart Mengwall
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
<PAGE>
PRIMIX SOLUTIONS INC.
ONE ARSENAL MARKETPLACE
WATERTOWN, MA 02472
(617) 923-6500
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY, JUNE 25, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Primix
Solutions Inc. (the "Company") will be held on Friday, June 25, 1999, 1:00 p.m.
eastern time, at Exchange Place, 53 State Street, Boston, MA 02109 (the "Annual
Meeting") for the purpose of considering and voting upon:
1. The election of one Class III Director for a three-year term;
2. An amendment to the Company's 1996 Stock Plan to increase the authorized
number of shares of the Company's Common Stock to be issued thereunder
from 1,745,867 to 3,500,000; and
3. Such other business as may properly come before the Annual Meeting and
any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on May 6, 1999 as the
record date for the determination of stockholders entitled to notice of, and to
vote at, the Annual Meeting and any adjournments or postponements thereof. Only
holders of Common Stock of record at the close of business on such date will be
entitled to notice of, and to vote at, the Annual Meeting and any adjournments
or postponements thereof.
In the event there are not sufficient shares to be voted in favor of any of
the foregoing proposals at the time of the Annual Meeting, the Annual Meeting
may be adjourned in order to permit further solicitation of proxies.
By Order of the Board of Directors
/s/ DAVID W. CHAPMAN
CORPORATE SECRETARY
Watertown, MA
June 3, 1999
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF
YOU ARE A STOCKHOLDER OF RECORD AND YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE
IN PERSON, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE>
PRIMIX SOLUTIONS INC.
ONE ARSENAL MARKETPLACE
WATERTOWN, MA 02472
(617) 923-6500
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY, JUNE 25, 1999
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Primix Solutions Inc. (the "Company") for
use at the Annual Meeting of Stockholders of the Company to be held on Friday,
June 25, 1999, 1:00 p.m. eastern time, at Exchange Place, 53 State Street,
Boston, MA 02109, and any adjournments or postponements thereof (the "Annual
Meeting").
At the Annual Meeting, the stockholders of the Company will be asked to
consider and vote upon the following matters:
1. The election of one Class III Director of the Company for a
three-year term, with such term to continue until the annual meeting of
stockholders to be held in the year 2002 (the "2002 Annual Meeting") and
until such Director's successor is duly elected and qualified;
2. An amendment to the Company's 1996 Stock Plan (the "1996 Stock Plan")
to increase the authorized number of shares of the Company's Common Stock to
be issued thereunder from 1,745,867 to 3,500,000 (the "1996 Stock Plan
Amendment"); and
3. Such other business as may properly come before the meeting and any
adjournments or postponements thereof.
The Notice of Annual Meeting, Proxy Statement and Proxy Card are first being
mailed to stockholders of the Company on or about June 3, 1999 in connection
with the notice of, and solicitation of proxies for, the Annual Meeting. The
Board of Directors has fixed the close of business on May 6, 1999 as the record
date for the determination of stockholders entitled to notice of, and to vote
at, the Annual Meeting (the "Record Date"). Only holders of record of the
Company's Common Stock, par value $.001 per share ("Common Stock"), at the close
of business on the Record Date will be entitled to notice of, and to vote at,
the Annual Meeting. As of the Record Date, there were approximately 14,618,160
shares of Common Stock outstanding and entitled to vote at the Annual Meeting
and approximately 128 stockholders of record. Each holder of shares of Common
Stock outstanding as of the close of business on the Record Date will be
entitled to one vote for each share held of record with respect to the matters
submitted at the Annual Meeting.
The presence, in person or by proxy, of a majority of the total number of
outstanding shares of Common Stock is necessary to constitute a quorum for the
transaction of business at the Annual Meeting. A quorum being present, (i) the
affirmative vote of a plurality of the votes cast is necessary for the election
of the Class III Director and (ii) the affirmative vote of the holders of a
majority of shares of the Common Stock, present or represented and entitled to
vote is necessary for the approach of the 1996 Stock Plan Amendment.
Shares that reflect abstentions or "broker non-votes" (I.E., shares
represented at the meeting held by brokers or nominees as to which the
instructions have not been received from the beneficial owners or persons
entitled to vote such shares and with respect to which the broker or nominee
does not have discretionary voting power to vote such shares) will be counted
for purposes of determining whether a quorum is present for the transaction of
business at the meeting. With respect to the election of Directors, votes may be
cast in favor of or withheld from the nominee; votes that are withheld and
broker non-votes will be excluded entirely from the vote and will have no
effect. With respect to Proposal 2 (1996 Stock Plan Amendment), broker non-votes
will have no effect on the outcome of the approval for the 1996 Stock Plan
Amendment and abstentions shall have the effect of a vote against such proposal.
<PAGE>
STOCKHOLDERS OF THE COMPANY ARE REQUESTED TO COMPLETE, DATE, SIGN AND RETURN
THE ACCOMPANYING PROXY CARD IN THE ENCLOSED ENVELOPE. COMMON STOCK REPRESENTED
BY PROPERLY EXECUTED PROXIES RECEIVED BY THE COMPANY AND NOT REVOKED WILL BE
VOTED AT THE ANNUAL MEETING IN ACCORDANCE WITH THE INSTRUCTIONS CONTAINED
THEREIN. IF INSTRUCTIONS ARE NOT STATED THEREIN, PROPERLY EXECUTED PROXIES WILL
BE VOTED "FOR" THE ELECTION OF THE NOMINEE FOR DIRECTOR NOMINEE NAMED IN THIS
PROXY STATEMENT AND "FOR" THE 1996 STOCK PLAN AMENDMENT. IT IS NOT ANTICIPATED
THAT ANY MATTERS OTHER THAN THE ELECTION OF A DIRECTOR OR THE 1996 STOCK PLAN
AMENDMENT WILL BE PRESENTED AT THE ANNUAL MEETING. IF OTHER MATTERS ARE
PRESENTED, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE DISCRETION OF THE PROXY
HOLDERS.
Any properly completed proxy may be revoked by the stockholder of record
represented by such proxy at any time before it is voted on any matter (without,
however, affecting any vote taken prior to such revocation) by giving written
notice of such revocation to the Secretary of the Company, or by signing and
duly delivering a proxy bearing a later date, or by attending the Annual Meeting
and voting in person. Attendance at the Annual Meeting will not, by itself,
revoke a proxy.
The Annual Report of the Company, including financial statements for the
fiscal year ended December 31, 1998 ("Fiscal Year 1998"), is being mailed to
stockholders of the Company concurrently with this Proxy Statement. The Annual
Report, however, is not a part of the proxy solicitation materials.
PROPOSAL 1
ELECTION OF DIRECTOR
The Board of Directors of the Company (the "Board") is divided into three
classes and is comprised of two Directors in Class I and one Director in each of
Classes II and III. Directors serve for three-year terms with one class of
Directors being elected by the Company's stockholders at each annual meeting.
At the Annual Meeting, one Class III Director will be elected to serve until
the 2002 Annual Meeting and until such Director's successor is duly elected and
qualified. The Board has nominated Robert B. Hedges Jr. (the "Nominee") for
re-election as a Class III Director. Mr. Hedges was appointed to the Board in
October 1998 to fill the vacancy created by the resignation of Mr. Stephen Levy.
Unless otherwise specified in the proxy, it is the intention of the persons
named in the proxy to vote the shares represented by each properly executed
proxy for the re-election of the Nominee as a Director. The Nominee has agreed
to stand for election and to serve, if elected, as a Director. However, if the
Nominee fails to stand for election or is unable to accept election, proxies
will be voted for the election of such other person as the Board may recommend.
VOTE REQUIRED FOR APPROVAL
A quorum being present, the affirmative vote of a plurality of the votes
cast is necessary to elect the Nominee as a Director of the Company.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEE OF THE BOARD AS
A DIRECTOR OF THE COMPANY.
2
<PAGE>
INFORMATION REGARDING DIRECTORS
The Board held twelve (12) meetings during Fiscal Year 1998. During Fiscal
Year 1998, each of the incumbent Directors attended at least 75% of the total
number of meetings of the Board and of the committees of which he was a member
held during his term of office. The Company's Board has established an Audit
Committee and a Compensation Committee.
The Audit Committee recommends the firm to be appointed as independent
accountants to audit financial statements and to perform services related to the
audit, reviews the scope and results of the audit with the independent
accountants, reviews with management and the independent accountants the
Company's year-end operating results, considers the adequacy of the internal
accounting procedures and considers the effect of such procedures on the
accountants' independence. The Audit Committee consists of Lennart Mengwall,
Ofer Nemirovsky and Robert Hedges, and held four (4) meetings during Fiscal Year
1998.
The Compensation Committee reviews and recommends the compensation
arrangements for all Directors and officers, approves such arrangements for
other senior level employees and administers and takes such other action as may
be required in connection with certain compensation and incentive plans of the
Company. The Compensation Committee also determines the options or stock to be
issued to eligible persons under the Company's 1995 Stock Plan and the 1996
Stock Plan (the "Stock Plans"), construes and interprets the Stock Plans, and
prescribes the terms and conditions of such options or stock. The Compensation
Committee also administers the Company's Employee Stock Purchase Plan. In
addition, the Compensation Committee establishes, amends and revokes rules and
regulations for the administration of all such plans. The Compensation Committee
consists of Ofer Nemirovsky and Kevin Azzouz. During Fiscal Year 1998,
compensation related matters were addressed by the full Board.
Directors who are officers or employees of the Company receive no
compensation for service as Directors. Generally, Directors who are not officers
or employees of the Company receive such compensation for their services as the
Board may from time to time determine. Each of Ofer Nemirovsky, Kevin Azzouz
former Director Stephen Levy and Robert Hedges ("Non-Employee Directors")
received fees of $18,950, $0, $19,550 and $1,250, respectively, for meetings
attended during Fiscal Year 1998. In addition, Mr. Nemirovsky and Mr. Levy were
each granted an option to purchase 7,000 shares of Common Stock at an exercise
price of $12.00 per share. Mr. Hedges was granted an option to purchase 7,000
shares of Common Stock at an exercise price of $1.813 per share upon his
appointment to the Board in October 1998. Each continuing Non-Employee Director
also automatically receives on January 1 of each year an option to purchase
1,700 shares of Common Stock at an exercise price per share equal to the fair
market value of the underlying Common Stock as determined under the 1996 Stock
Plan. Currently, each of these options vest annually in equal installments over
a four-year period and expires ten years from the date of grant. All Directors
are reimbursed for expenses incurred in connection with attendance at meetings.
3
<PAGE>
Set forth below is certain information regarding the Directors of the
Company, including the Class III Director who has been nominated for the
election at the Annual Meeting, based on information furnished by them to the
Company.
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE
- ----------------------------------------------------------------------- --- ---------------
<S> <C> <C>
Class I--Term Expires 2000
Ofer Nemirovsky........................................................ 39 March 1996
Lennart Mengwall....................................................... 56 May 1997
Class II--Term Expires 2001
Kevin Azzouz........................................................... 39 May 1997
Class III--Term Expires 1999
Robert B. Hedges Jr.*.................................................. 41 October 1998
</TABLE>
- ------------------------
* Nominee for re-election
The principal occupation and business experience for at least the last five
years of each Director of the Company is set forth below.
Lennart Mengwall has served as Chairman of the Board, Chief Executive
Officer and President since May 1997. Mr. Mengwall formerly served as the
Chairman and Chief Executive Officer of Quest Development Corp. from 1989 to
1993. Mr. Mengwall is presently a general partner of Avix Associates, L.P.,
which is in turn the general partner of Avix Ventures, L.P., a principal
stockholder of the Company.
Kevin Azzouz has served as a Director of the Company since May 1997. Mr.
Azzouz formerly served as the President of Quest Development Corp. from 1989 to
1994. From 1994 to March 1996, Mr. Azzouz served as the President and Chief
Operating Officer of Arcada Software. Mr. Azzouz is presently a general partner
of Avix Associates, L.P., which is in turn the general partner of Avix Ventures,
L.P., a principal stockholder of the Company.
Robert Hedges has served as a Director of the Company since October 1998.
Mr. Hedges is the Managing Director of the Retail Distribution Group at Fleet
Financial Group ("Fleet"). From 1995 to 1997, Mr. Hedges served as Fleet's
Director of Direct Financial Services Group. From 1993 to 1995, Mr. Hedges was
the Head of Consumer Banking at Shawmut Bank. Mr. Hedges also serves as a
director of NYCE.
Ofer Nemirovsky has served as a Director of the Company since March 1996.
Mr. Nemirovsky is a Managing Director of HarbourVest Partners, LLC and Hancock
Venture Partners, Inc. ("HVP"). Prior to joining HVP in 1986, Mr. Nemirovsky
held various computer sales and marketing positions at Hewlett-Packard. He is
currently a director of several privately held companies.
4
<PAGE>
EXECUTIVE OFFICERS
Set forth below is certain information regarding each of the current
executive officers of the Company.
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------------------------- --- -----------------------------------------------------
<S> <C> <C>
Lennart Mengwall..................................... 56 Chairman of the Board and Chief Executive Officer
Joseph W. Seebach.................................... 37 Executive Vice President
David W. Chapman..................................... 35 Chief Financial Officer, Treasurer and Secretary
</TABLE>
The principal occupation and business experience for the last five years of
the Company's executive officers, other than such officers who also served as
Directors, is set forth below.
Joseph W. Seebach joined the Company as Senior Vice President in July 1997
and assumed the position of President of Software Products Group in October
1997. After the Company consolidated its operations to one business unit, Mr.
Seebach was appointed to Senior Vice President of Sales & marketing and most
recently to the position of Executive Vice President. Prior to joining the
Company, Mr. Seebach served as General Manager, Consumer Products Division of
Seagate Software from January 1997 to July 1997, Vice President, Strategic
Accounts of Seagate Software from 1996 to 1997, Vice President, Strategic
Business of Arcada Software from 1994 to 1996 and Director of Software
Development and Director of OEM Sales of Quest Development Corp. from 1993 to
1994.
David W. Chapman was appointed as the Company's Chief Financial Officer in
March 1998 and previously served as the Controller of the Company since
September 1995. Mr. Chapman was appointed as Secretary of the Company in
February 1998. From December 1993 to August 1995, Mr. Chapman was the Accounting
Manager of Astrum International. Mr. Chapman also held various positions with
the accounting firm of Deloitte & Touche from 1988 to 1993. Mr. Chapman has been
a certified public accountant since 1991.
Each of the officers holds his respective office until the regular annual
meeting of the Board of Directors following the annual meeting of stockholders
and until his successor is elected and qualified or until his earlier
resignation or removal.
5
<PAGE>
EXECUTIVE COMPENSATION
The following sections of this Proxy Statement set forth and describe the
compensation paid or awarded to the Company's Chief Executive Officer and the
other most highly compensated executive officers who earned in excess of
$100,000 during Fiscal Year 1998 ("named executive officers").
SUMMARY COMPENSATION
SUMMARY COMPENSATION. The following summary compensation table sets forth
information concerning compensation for services rendered in all capacities
awarded to, earned by or paid to the Company's Chief Executive Officer and the
other named executive officers during each of fiscal years ended December 31,
1998, December 31, 1997 and December 31, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION SECURITIES
----------------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) COMPENSATION ($) (1)
- ----------------------------------------------------- --------- ----------- ----------- ------------- ---------------------
<S> <C> <C> <C> <C> <C>
Lennart Mengwall, Chairman of the Board 1998 -- -- -- --
Chief Executive Officer and President (2).......... 1997 -- -- -- --
Joseph W. Seebach, 1998 161,654 62,560 -- --
Executive Vice President (2)....................... 1997 83,078 75,000 350,000 --
David W. Chapman, Chief Financial Officer, 1998 112,654 16,705 -- 1,940
Treasurer and Secretary (2)........................
Peter Marton, Former President of Consulting Services 1998 194,615 -- 275,000 1,500
Group (3)..........................................
</TABLE>
- ------------------------
(1) Represents Company contributions to the Company's 401(k) plan on behalf of
the executives.
(2) Messrs. Mengwall and Seebach were not executive officers of the Company
during 1996 and Mr. Chapman was not an executive officer of the Company
during 1996 or 1997.
(3) Mr. Marton joined the Company during 1998 and resigned from the Company in
February 1999. In connection with the termination of employment of Mr.
Marton, his unvested options to purchase 275,000 shares were canceled
immediately upon termination of employment on February 15, 1999.
6
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
OPTION GRANTS.
The following table sets forth certain information concerning the individual
grant of options to purchase Common Stock of the Company to the named executive
officers of the Company who received options during Fiscal Year 1998.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS
------------------------------------------------------------ VALUE AT ASSUMED ANNUAL
NUMBER OF PERCENT
SECURITIES OF TOTAL OF STOCK PRICE
UNDERLYING OPTIONS EXERCISE APPRECIATION FOR
OPTIONS GRANTED RATES OPTION TERM (1)
GRANTED TO EMPLOYEES OR BASE EXPIRATION ------------------------
NAME (#) IN FISCAL YEAR PRICE ($/SH) DATE 5%($) 10%($)
- ------------------------------------------- ----------- ----------------- --------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Peter Marton (2)........................... 275,000 26% 2.50 2/15/99 -- --
</TABLE>
- ------------------------
(1) This column shows the hypothetical gain or option spreads of the options
granted based on assumed annual compound stock appreciation rates of 5% and
10% for the exercise price of such options over the full 10-year term of the
options. The 5% and 10% assumed rates of appreciation are mandated by the
rules of the Securities and Exchange Commission and do not represent the
Company's estimate or projection of future Common Stock prices.
(2) In connection with the termination of employment of Mr. Marton, his unvested
options to purchase 275,000 shares were canceled immediately upon
termination of employment on February 15, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
OPTION EXERCISES AND OPTION VALUES. The following table sets forth
information concerning the number of underlying shares and value of unexercised
options to purchase Common Stock of the Company held by the named executive
officers as of December 31, 1998.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT DECEMBER 31, 1998 AT DECEMBER 31, 1998 ($)(1)
------------------------------------- ------------------------------------------
<S> <C> <C> <C> <C>
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------ ----------------- ------------------ ------------------- ---------------------
Joseph W. Seebach......................... 78,125 171,875 -- --
Peter Marton.............................. -- 275,000 -- --
David Chapman............................. 13,438 29,069 -- --
</TABLE>
- ------------------------
(1) Based on the last reported sale price on the Nasdaq National Market on
December 31, 1998 less the option exercise price. As of December 31, 1998
there were no options held by officers of the Company for which the exercise
price of the option was in excess of the market price.
7
<PAGE>
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
The Company has entered into letter agreements with each of its executive
officers (other than Lennart Mengwall, the Company's Chairman and Chief
Executive Officer), providing for base salary, bonus, incentive compensation and
relocation expense reimbursement, as applicable.
The letter agreement with Joseph Seebach dated July 8, 1997 provides for
certain severance benefits, including base salary for one year and the
acceleration of certain options, in the event of a termination of employment
within eighteen months of a change of control. In the event Mr. Seebach is
terminated without cause at any time during the initial 24 months of employment,
he is entitled to receive his base salary and continued vesting of his options
for the duration of such 24 months period or six months after termination,
whichever is later. Under an agreement dated February 26, 1998, David W. Chapman
is entitled to receive his base salary for six months after termination of his
employment for any reason other than gross misconduct.
Under the Company's standard Employee Agreement, each of the executives is
subject to provisions concerning the ownership, use and disclosure of the
Company's confidential information and intellectual property, and a one-year
restriction on competition with the Company following termination of employment
for any reason.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The Compensation Committee of the Board of Directors of the Company
currently consists of Ofer Nemirovsky and Kevin Azzouz.
COMPENSATION POLICIES FOR EXECUTIVE OFFICERS. The Compensation Committee's
executive compensation philosophy is: (i) to provide competitive levels of
compensation that integrate pay with the individual executive's performance and
the Company's annual and long-term performance goals; (ii) to motivate key
executives to achieve strategic business goals and reward them for their
achievement; (iii) to provide compensation opportunities and benefits that are
comparable to those offered by other companies in the information technology
consulting services industry, thereby allowing the Company to compete for and
retain talented executives who are critical to the Company's long-term success;
and (iv) to align the interests of key executives with the long-term interests
of stockholders and the enhancement of stockholder value through the granting of
stock options.
The compensation of the Company's executive officers (other than Lennart
Mengwall, the Company's Chairman and Chief Executive Officer) is currently
comprised of annual base salary, annual performance incentives in the form of
cash bonuses, and long-term performance incentives in the form of stock option
grants under the Stock Plans.
The Compensation Committee has determined that the base salaries of
executive officers should be set at levels that are competitive with those in
the information technology consulting services industry. In addition, the
Compensation Committee believes that it is appropriate to reward outstanding
performance through a combination of cash bonuses and stock options to provide a
competitive compensation package that will enable the Company to attract and
retain the executives needed to achieve such performance. The Compensation
Committee also has determined that any stock option or other equity-based
compensation should involve long-term vesting to encourage tenure and
enhancement of stockholder value over the long-term.
BASE SALARY AND BONUSES. Base salaries, bonuses and other compensation for
executive officers are targeted according to the salaries of employees holding
similar offices and having similar responsibilities within the information
technology consulting services industry. Annual salary adjustments for executive
officers are determined by evaluating the competitive marketplace, the
performance of the Company, the performance of the executive officers and any
change in the responsibilities assumed by the executive officers. Salary
adjustments are normally determined and made on an annual basis.
8
<PAGE>
STOCK OPTION GRANTS. Stock options are designed to attract and retain
executives who can make significant contributions to the Company's success;
reward executives for such significant contributions; and give executives a
long-term incentive to encourage tenure; and align the interests of the
Company's executives with those of its stockholders. In determining whether to
grant stock options to executive officers, the Compensation Committee evaluates
each officer's performance, and awards reflect individual performance reviews.
The Compensation Committee also may grant stock options for executive retention
purposes, taking into account, among other things, general industry practices.
Stock options typically vest over four years in order to encourage performance
over the long-term. Stock options generally have been granted with a ten-year
term and an exercise price equal to 100% of the fair market value of the Common
Stock on the grant date.
COMPENSATION OF CHIEF EXECUTIVE OFFICER. Lennart Mengwall, the Company's
Chairman and Chief Executive Officer, currently receives no compensation in view
of certain potential restrictions under the Delaware General Corporation Law.
OFER NEMIROVSKY KEVIN AZZOUZ
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Since May 10, 1996 all executive officer compensation decisions have been
made by the Compensation Committee or the full board of Directors. The
Compensation Committee reviews and makes recommendations regarding the
compensation for top management and key employees of the Company, including
salaries and bonuses. No member of the Compensation Committee is an officer of
the Company. The current members of the Compensation Committee are Ofer
Nemirovsky and Kevin Azzouz. No member of the Compensation Committee is an
officer of the Company. All Directors participated in deliberations of the
Company's Board of Directors concerning executive compensation during Fiscal
Year 1998.
9
<PAGE>
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock, based on
the market price of the Company's Common Stock with the total return of
companies included within the Nasdaq Stock Market Index and a peer group of
companies included within the Nasdaq Computer & Data Processing Industry Stock
Index, for the period commencing July 3, 1996 and ending December 31, 1998. The
calculation of total cumulative return assumes a $100 investment in the
Company's Common Stock, the Nasdaq Stock Market Index and the Nasdaq Computer &
Data Processing Industry Stock Index on July 3, 1996, the date of the Company's
initial public offering, and the reinvestment of all dividends.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TOTAL RETURNS INDEX
FOR:
<S> <C> <C> <C>
Nasdaq Computer
and Data Processing
Nasdaq Stock Stocks
Primix Market (US (SLC 7370-7379
Solutions Inc. Companies) US & Foreign)
7/3/96 100.000 100.000 100.000
7/31/96 83.333 91.375 90.172
8/30/96 83.333 96.496 92.583
9/30/96 84.028 103.876 102.692
10/31/96 77.778 102.728 100.883
11/29/96 61.111 109.079 108.124
12/31/96 43.403 108.981 106.782
1/31/97 14.583 116.727 116.475
2/28/97 13.889 110.25 107.029
3/31/97 11.111 103.051 99.117
4/30/97 11.111 106.272 112.051
5/30/97 10.417 118.315 124.371
6/30/97 14.931 121.939 127.094
7/31/97 15.972 134.802 140.304
8/29/97 15.625 134.593 136.561
9/30/97 15.625 142.535 138.996
10/31/97 11.111 135.132 136.123
11/28/97 9.722 135.816 139.558
12/31/97 9.028 133.493 131.181
1/30/98 6.597 137.733 141.071
2/27/98 10.417 150.686 160.121
3/31/98 15.278 156.222 173.263
4/30/98 18.75 158.799 174.723
5/29/98 13.889 149.969 162.501
6/30/98 13.889 160.482 191.992
7/31/98 13.889 158.57 185.626
8/31/98 11.632 127.268 150.997
9/30/98 10.937 144.969 180.377
10/30/98 9.722 151.226 175.272
11/30/98 12.847 166.532 202.783
12/31/98 10.417 188.107 234.198
NOTES:
A. The lines represent monthly index levels derived
from
compounded daily returns that include all dividends.
B. The indexes are reweighted daily, using the
market
capitalization on the previous trading day.
C. If the monthly interval, based on the fiscal
year-end,
is not a trading day, the preceding trading day is
used.
D. The index level for all series was set to $100.0
on
07/03/1996.
</TABLE>
MARKET VALUE
On December 31, 1998, the closing price of a share of the Company's Common
Stock on the Nasdaq National Market was $1.875.
10
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On February 3, 1998, the Company issued a promissory note in the amount of
$150,000 to Joseph W. Seebach, the Company's Vice President of Sales &
Marketing. The promissory note is secured by a perfected, first priority
security interest in 100,000 restricted shares of the Company's Common Stock
owned by Mr. Seebach. The promissory note is payable on December 31, 1999, and
bears interest at a rate of six and one-half percent per annum.
CONFLICTS OF INTEREST
Conflicts of interest may arise in the course of business transactions
between the Company, its officers, Directors and principal stockholders, and
their affiliates. The Company believes that the transactions in which it was a
party as described above were at terms no less favorable than the Company would
have obtained from unaffiliated third parties. In connection with the Company's
initial public offering, the Company adopted a policy that all future
transactions between the Company and its officers, Directors or other affiliates
(other than compensation and employment matters) be reviewed by the Board of
Directors on an on-going basis and submitted to the Audit Committee or other
comparable body for review where appropriate.
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
The following table sets forth, to the best knowledge and belief of the
Company, certain information regarding the beneficial ownership of the Company's
Common Stock as of the date indicated by (i) each person known by the Company to
be the beneficial owner of more than 5% of the outstanding Common Stock as of
December 31, 1998, (ii) each of the Company's Directors as of the Record Date,
(iii) each of the named executive officers as of the Record Date and (iv) the
Company's executive officers and Directors as a group as of the Record Date.
<TABLE>
<CAPTION>
BENEFICIAL PERCENTAGE
NAME OF BENEFICIAL OWNER (1) SHARES (1) (2)
- -------------------------------------------------------------------------------------- ---------- -------------
<S> <C> <C>
Avix Ventures, L.P. (3)............................................................... 7,748,871 53.0%
160 West 66th Street
New York, NY 10023
OFFICERS AND DIRECTORS:
Lennart Mengwall (4)................................................................ 8,070,538 55.2%
Joseph W. Seebach (5)............................................................... 281,400 1.9%
David W. Chapman (6)................................................................ 19,718 *
Peter Marton........................................................................ -- --
Robert Hedges....................................................................... -- --
Ofer Nemirovsky (7)................................................................. 488,084 3.3%
Kevin Azzouz (8).................................................................... 7,748,871 53.2%
All Directors and executive officers as a group (6 persons) (9)..................... 8,795,592 59.6%
</TABLE>
- ------------------------
* Represents less than 1% of the outstanding shares.
(1) Information with respect to beneficial owners of more than 5% of the
outstanding shares of Common Stock is based solely on information provided
to the Company and reported to the Commission on Schedules 13G filed as of
February 17, 1998.
(2) All percentages have been determined as of the Record Date, in accordance
with Rule 13d-3 under the Securities Exchange Act of 1934, as amended. As of
the Record Date, a total of approximately 14,618,160 shares of Common Stock
were issued and outstanding and options to acquire a total of 400,959 shares
of Common Stock were exercisable within 60 days.
11
<PAGE>
(3) As reported on Schedule 13D/A filed with the Securities and Exchange
Commission on June 24, 1997 by Avix Ventures, L.P., of which Avix
Associates, L.P. is the general partner, of which Lennart Mengwall and Kevin
Azzouz are general partners.
(4) Represents 7,748,871 shares held by Avix Ventures, L.P. and 321,667 shares
beneficially owned by Mr. Mengwall. Mr. Mengwall is a general partner of
Avix Associates, L.P., the general partner of Avix Ventures, L.P.
(5) Includes 125,000 shares which Mr. Seebach may acquire upon exercise of stock
option within 60 days of the Record Date.
(6) Includes 19,618 shares which Mr. Chapman may acquire upon exercise of stock
options within 60 days of the Record Date.
(7) Includes (i) 457,280 shares held by Hancock Venture Partners IV-Direct Fund
L.P. and 24,067 shares held by Falcon Ventures II, L.P., the respective
general partners of which Mr. Nemirovsky is a general partner, but as to
which Mr. Nemirovsky disclaims beneficial ownership and (ii) 6,737 shares of
which Mr. Nemirovsky may acquire upon exercise of a stock option within 60
days after the Record Date.
(8) Represents shares held by Avix Ventures, L.P. Mr. Azzouz is a general
partner of Avix Associates, L.P., the general partner of Avix Ventures, L.P.
Mr. Azzouz is a general partner of Avix Associates, L.P., the general
partner of Avix Venture, L.P.
(9) Includes 151,355 shares which may be acquired upon exercise of stock options
within 60 days of the Record Date.
PROPOSAL 2
APPROVAL OF AMENDMENT TO THE 1996 STOCK PLAN
The Board of Directors had adopted and is seeking shareholder approval of an
amendment to the 1996 Stock Plan which would increase the number of shares
eligible for grant under the 1996 Stock Plan from 1,745,867 to 3,500,000. The
1996 Stock Plan is designed and intended as a performance incentive for
officers, Directors, employees, consultants and other key persons performing
services for the Company ("Eligible Persons").
Based solely on the last reported sale price of Common Stock on the Nasdaq
National Market on the Record Date of $2.563 per share, the maximum aggregate
market value of the additional 1,754,133 shares of Common Stock reserved for
issuance under the 1996 Stock Plan would be approximately $4,495,843.
The Board of Directors believes that increasing the number of shares
eligible for grant under the 1996 Stock Plan provides the Company greater
flexibility in granting incentive based compensation to the Eligible Persons.
VOTE REQUIRED FOR APPROVAL
A quorum being present, the affirmative vote of a majority of the holders of
shares of Common Stock, present or represented and entitled to vote on the
matter is required to approve the 1996 Stock Plan Amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE AMENDMENT
TO THE 1996 STOCK PLAN.
PLAN ADMINISTRATION; ELIGIBILITY. The 1996 Stock Plan is administered by
the Board or by a committee appointed by the Board in accordance with the rules
and regulations promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). All members of such committee must be
"non-employee directors" as that term is defined under the rules promulgated by
the Securities and Exchange Commission and "outside directors" as defined in
Section 162 of the Code and the regulations
12
<PAGE>
promulgated thereunder. The Board or authorized committee will interpret and
make any determination under the 1996 Stock Plan and any grants granted
thereunder. The 1996 Stock Plan is currently administered by the Board and the
Compensation Committee (the "Committee"). The Committee has full power to select
from among the Eligible Persons the individuals to whom awards will be granted,
to make any combination of awards to such individuals, and to determine the
specific terms and conditions of each award, subject to the provisions of the
1996 Stock Plan. Under the 1996 Stock Plan, the Committee, in its discretion,
may delegate to the Chief Executive Officer of the Company, all or part of the
Committee's authority and duties with respect to the granting of awards under
the 1996 Stock Plan to individuals who are not subject to Section 16 of the
Exchange Act or are "covered employees" within the meaning of Section 162(m) of
the Code.
AWARDS. The 1996 Stock Plan permits the grant of (i) options to purchase
Common Stock intended to qualify as incentive stock options ("Incentive
Options") under Section 422 of the Code, (ii) options that do not so qualify
("Non-Qualified Options") and (iii) shares of Common Stock. Under the 1996 Stock
Plan, each non-employee Director first joining the Board will receive an
automatic option grant to purchase 7,000 shares of Common Stock when such
Director is first elected or appointed to the Board. In addition, each
non-employee Director will receive an automatic option grant to purchase 1,700
shares under the 1996 Stock Plan on each January 1 that such Director is a
member of the Board. The exercise price of all option shares granted to
non-employee Directors under the 1996 Stock Plan will be at the fair market
value of the Common Stock at the time of the grant and all such options will
vest in equal annual installments over a four-year period. The option exercise
price of Incentive Options may not be less than 100% of the fair market value of
the Common Stock on the date of grant. The exercise price for Non-Qualified
Options and the purchase price for Common Stock awards is determined at the
discretion of the Committee, subject to the limitations set forth in the 1996
Stock Plan. To qualify as Incentive Options, options must meet additional
Federal tax requirements, including limits on the value of shares subject to
Incentive Options which first become exercisable in any one calendar year, and a
shorter term and higher minimum exercise price in the case of certain large
stockholders.
The term of each option will be fixed by the Committee and may not exceed
ten years from date of grant in the case of an Incentive Option. The Committee
will determine at what time or times each option may be exercised and, subject
to the provisions of the 1996 Stock Plan, the period of time, if any, after
retirement, death, disability or termination of employment during which options
may be exercised. Options may be made exercisable in installments, and the
exercisability of options may be accelerated by the Committee.
Upon exercise, the option exercise price must be paid in full either in cash
or check or, if the Committee so permits, by delivery of shares of Common Stock
already owned by the optionee or optionee's personal recourse note. Under the
1996 Stock Plan, the option exercise price may also be delivered to the Company
by a broker pursuant to irrevocable instructions to the broker from the optionee
or by delivery of a promissory note if such loan of funds is authorized by the
Board.
AMENDMENTS AND TERMINATION. The Board may at any time amend or discontinue
the 1996 Stock Plan. However, amendments to the 1996 Stock Plan may be subject
to approval by the Company's stockholders if and to the extent required by the
Code to preserve the qualified status of Incentive Options and as otherwise
provided in the 1996 Stock Plan. No action may be taken which adversely affects
any rights under outstanding options without the holder's consent.
CHANGE OF CONTROL PROVISIONS. The 1996 Stock Plan provides that at upon a
change of control of the Company, the 1996 Stock Plan and the options granted
thereunder will terminate unless an assumption or substitution of such options
is provided therefor.
13
<PAGE>
TAX ASPECTS UNDER THE U.S. INTERNAL REVENUE CODE
The following is a summary of the principal Federal income tax consequences
of option grants under the 1996 Stock Plan. It does not describe all Federal tax
consequences under the 1996 Stock Plan, nor does it describe state or local tax
consequences.
INCENTIVE OPTIONS. Under the Code, an employee will not realize taxable
income by reason of the grant or the exercise of an Incentive Option. If an
employee exercises an Incentive Option and does not dispose of the shares issued
thereunder until the later of (a) two years from the date the option was granted
or (b) one year from the date the shares were transferred to the employee, the
entire gain, if any, realized upon disposition of such shares will be taxable to
the employee as long-term capital gain, and the Company will not be entitled to
any deduction. If an employee disposes of the shares within such one-year or
two-year period in a manner so as to violate the holding period requirements (a
"disqualifying disposition"), the employee generally will realize ordinary
income in the year of disposition, and the Company will receive a corresponding
deduction, in an amount equal to the excess of (1) the lesser of (x) the amount,
if any, realized on the disposition and (y) the fair market value of the shares
on the date the option was exercised over (2) the option price. Any additional
gain realized on the disposition of the shares acquired upon exercise of the
option will be long-term or short-term capital gain and any loss will be
long-term or short-term capital loss depending upon the holding period for such
shares. The employee will be considered to have disposed of his shares if he
sells, exchanges, makes a gift of or transfers legal title to the shares (except
by pledge or by transfer on death). If the disposition of shares is by gift and
violates the holding period requirements, the amount of the employee's ordinary
income (and the Company's deduction) is equal to the fair market value of the
shares on the date of exercise less the option price. If the disposition is by
sale or exchange, the employee's tax basis will equal the amount paid for the
shares plus any ordinary income realized as a result of the disqualifying
distribution. The exercise of an Incentive Option may subject the employee to
the alternative minimum tax. Special rules apply if an employee surrenders
shares of Common Stock in payment of the exercise price of his Incentive Option.
An Incentive Option that is exercised by an employee more than three months
after an employee's employment terminates will be treated as a Non-Qualified
Option for Federal income tax purposes. In the case of an employee who is
disabled, the three-month period is extended to one year and in the case of an
employee who dies, the three-month employment rule does not apply.
NON-QUALIFIED OPTIONS. There are no Federal income tax consequences to
either the optionee or the Company on the grant of a Non-Qualified Option. On
the exercise of a Non-Qualified Option, the optionee (except as described below)
has taxable ordinary income equal to the excess of the fair market value of the
Common Stock received on the exercise date over the option price of the shares.
The optionee's tax basis for the shares acquired upon exercise of a
Non-Qualified Option is increased by the amount of such taxable income. The
Company will be entitled to a Federal income tax deduction in an amount equal to
such excess. Upon the sale of the shares acquired by exercise of a Non-Qualified
Option, the optionee will realize long-term or short-term capital gain or loss
depending upon his or her holding period for such shares. Special rules apply if
an optionee surrenders shares of Common Stock in payment of the exercise price
of a Non-Qualified Option.
PARACHUTE PAYMENTS. The exercise of any portion of any option that is
accelerated due to the occurrence of a change of control of the Company may
cause a portion of the payments with respect to such accelerated options to be
treated as "parachute payments" as defined in the Code. Any such parachute
payments may be non-deductible to the Company, in whole or in part, and may
subject the recipient to a non-deductible 20% federal excise tax on all or
portion of such payment (in addition to other taxes ordinarily payable).
LIMITATION ON COMPANY'S DEDUCTIONS. As a result of Section 162(m) of the
Code, the Company's deduction for certain awards under the 1996 Stock Plan may
be limited to the extent that a Covered Employee (E.G., one of the named
executive officers) receives compensation in excess of $1,000,000 in such
14
<PAGE>
taxable year of the Company (other than performance-based compensation that
otherwise meets the requirements of Section 162(m) of the Code. To satisfy the
requirements of Section 162(m) of the Code, stock options with respect to no
more than 333,333 shares of Common Stock (subject to adjustment for stock splits
and similar events) may be granted to any one individual during any
one-calendar-year period.
NEW PLAN BENEFITS
The number of awards to be granted under the 1996 Stock Plan is
undeterminable at this time as grants of awards under the 1996 Stock Plan are
subject to the discretion of the Committee. As of the Record Date, approximately
91 persons were eligible to participate in the 1996 Stock Plan. The table below
shows the aggregate number of shares of Common Stock underlying awards that were
granted under the 1996 Stock Plan in Fiscal Year 1998.
<TABLE>
<CAPTION>
RANGE OF EXERCISE NUMBER OF SHARES
NAME OF GROUP PRICES ($) (1) UNDERLYING STOCK OPTIONS (2)
- ------------------------------ ----------------------- -------------------------------------
<S> <C> <C>
Lennart Mengwall, Chief -- --
Executive Officer and
President...................
Joseph Seebach, Executive Vice -- --
President...................
David W. Chapman, Chief -- --
Financial Officer, Treasurer
and Secretary...............
Peter Marton, Former President $2.50 275,000
of Consulting Services
(3).........................
Executive Group (3)........... $2.50 275,000
Non-Executive Director $1.625-1.813 10,400
Group.......................
Non-Executive Employee Group.. $1.25-3.063 784,900
</TABLE>
- ------------------------
(1) Represents range of exercise prices for options granted in Fiscal Year 1998.
(2) Represent aggregate number shares of Common Stock underlying the options
granted in Fiscal Year 1998.
(3) Mr. Marton joined the Company in 1998 and resigned from the Company in
February 1999. In connection with the termination of employment of Mr.
Marton, his unvested options to purchase 275,000 shares were canceled
immediately upon termination of employment on February 15, 1999.
EXPENSES OF SOLICITATION
The Company will bear the cost of soliciting proxies for the Annual Meeting.
In addition to solicitations by mail, certain Directors, officers and regular
employees of the Company (who will receive no compensation for their services
other than their regular compensation) may solicit proxies by telephone,
telegram or personal interview. Banks, brokerage houses, custodians, nominees
and other fiduciaries have been requested to forward proxy materials to the
beneficial owners of shares held of record by them and such custodians will be
reimbursed for their expenses.
15
<PAGE>
SUBMISSION OF STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Stockholder proposals intended to be presented at the Company's 2000 annual
meeting of stockholders must be received by the Company on or before February 4,
2000 in order to be considered for inclusion in the Company's proxy statement
and form of proxy for that meeting. The Company's By-laws provide that any
stockholder of record wishing to have a stockholder proposal considered at an
annual meeting must provide written notice of such proposal and appropriate
supporting documentation, as set forth in the By-laws, to the Company at its
principal executive office not less than 75 days or more than 120 days prior to
the first anniversary of the date of the preceding year's annual meeting. In the
event, however, that the annual meeting is scheduled to be held more than 30
days before such anniversary date or more than 60 days after such anniversary
date, notice must be so delivered not later than (i) the 15th day after the date
of public disclosure of the date of such meeting or (ii) the 75th day prior to
the scheduled date of such meeting. Any such proposal should be mailed to:
Secretary, Primix Solutions Inc., One Arsenal Marketplace, 2nd Floor, Watertown,
MA 02472.
INDEPENDENT ACCOUNTANTS
The Company has selected Arthur Andersen LLP as the independent public
accountants for the Company for the current fiscal year. The firm of Arthur
Andersen LLP has served as the Company's independent public accountants since
1996. A representative of Arthur Andersen LLP will be present at the Annual
Meeting and will be given the opportunity to make a statement if he or she so
desires. The representative will be available to respond to appropriate
questions.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and Directors, and persons who own more than 10% of the Company's
outstanding shares of Common Stock (collectively, "Section 16 Persons"), to file
initial reports of ownership and reports of changes in ownership with the
Commission and Nasdaq. Section 16 Persons are required by Commission regulations
to furnish the Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain Section 16 Persons that no Section 16(a)
reports were required for such persons, the Company believes that during Fiscal
Year 1998, the Section 16 Persons complied with all Section 16(a) filing
requirements applicable to them, with the exception of Robert Hedges, who did
not timely file Form 3 and Stephen Levy and Ofer Nemirovsky, who did not timely
file Forms 5 with respect to the annual grant of options to purchase 1,700
shares of Common Stock on January 1, 1998.
OTHER MATTERS
The Board of Directors does not know of any matters other than those
described in this Proxy Statement which will be presented for action at the
Annual Meeting. If other matters are duly presented, proxies will be voted in
accordance with the best judgment of the proxy holders.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
16
<PAGE>
APPENDIX A
AMENDMENT TO
PRIMIX SOLUTIONS INC.
1996 STOCK PLAN
A. The Primix Solutions Inc. (f/k/a/ OneWave, Inc.) 1996 Stock Plan (the
"Plan") is hereby amended by striking the number "1,745,867" and replacing it
with "3,500,000" in the second sentence of Section 5.
B. The effective date of this Amendment shall be June 25, 1999.
C. Except as amended herein, the Plan is confirmed in all other respects.
DATE APPROVED BY BOARD OF DIRECTORS: March 11, 1999.
DATE APPROVED BY STOCKHOLDERS: June 25, 1999.
<PAGE>
PRIMIX SOLUTIONS INC.
One Arsenal Marketplace
Watertown, Massachusetts 02472
Annual Meeting of Stockholders--June 25, 1999
Proxy Solicited on Behalf of the Board of Directors
The undersigned, revoking all prior proxies, hereby appoints Joseph W.
Seebach and David W. Chapman as proxies, with full power of substitution to
each, to vote for and on behalf of the undersigned at the 1999 Annual
Meeting of Stockholders of Primix Solutions Inc. (the "Company") to be held
at Exchange Place, 53 State Street, Boston, Massachusetts 021039 on Friday,
June 25, 1999 at 1:00 p.m., and at any adjournment or adjournments thereof.
The undersigned hereby directs the said proxies to vote in accordance with
their judgment on any matters which may properly come before the Annual
Meeting, all as indicated in the Notice of Annual Meeting, receipt of which
is hereby acknowledged, and to act on the following matters set forth in such
notice as specified by the undersigned.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1 AND 2.
- ------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) on the books of the Company.
Joint owners should each sign personally. Trustees and other fiduciaries
should indicate the capacity in which they sign, and where more than one name
appears, a majority must sign. If a corporation, this signature should be
that of an authorized officer who should state his or her title.
- ------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
<PAGE>
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
- ---------------------------------------
PRIMIX SOLUTIONS INC.
- ---------------------------------------
Mark box at right if an address change or comment had been / /
noted on the reverse side of this card.
CONTROL NUMBER:
RECORD DATE SHARES:
1. Election of Director
For the With-
Nominee hold
Robert B. Hedges, Jr. / / / /
NOTE: If you do not mark any box, your shares will be voted FOR this Proposal.
For Against Abstain
2. Amendment to the 1996 Stock Plan to increase
the authorized number of shares of Common / / / / / /
Stock to be issued thereunder from 1,745,867
to 3,500,000
NOTE: If you do not mark any box, your shares will be voted FOR this Proposal.
3. In their discretion, the proxies are authorized to vote upon such other
business that may properly come before the meeting or at any adjournment(s)
thereof.
-----------------------
Please be sure to sign and date this Proxy. Date
- ------------------------------------------------------------------------
- ---------Stockholder sign here-----------------Co-owner sign here-------
DETACH CARD DETACH CARD
PRIMIX SOLUTIONS INC.
Dear Stockholder,
Please take note of the important information enclosed with this Proxy
Ballot. There are a number of issues related to the management and
operation of your Corporation that require your immediate attention and
aproval. These are discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right
to vote your shares.
Please mark the boxes on this proxy card to indicate how your shares will
be voted. Then sign the card, detach it and return your proxy vote in the
enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Shareholders,
June 25, 1999.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Primix Solutions Inc.
