<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement / / Confidential, For Use of the
Commission Only (as permitted
by Rule 14a-6(e) (2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Premenos Technology Corp.
- ------------------------------------------------------------------------
(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 the 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>
Premenos Technology Corporation
1000 Burnett Avenue
Concord, California 94520
April 29, 1997
To our Stockholders:
You are cordially invited to attend the Annual Meeting of
Stockholders of Premenos Technology Corp. (the "Company"). The Annual
Meeting will be held on Thursday, May 29, 1997, at 1:00 p.m., at the
Hilton Hotel, located at 1970 Diamond Boulevard, Concord, California.
The actions expected to be taken at the Annual Meeting are described
in detail in the attached Proxy Statement and Notice of Annual Meeting
of Stockholders.
Included with the Proxy Statement is a copy of the Company's Annual
Report for fiscal year 1996. We encourage you to read the Annual
Report. It includes information on the Company's operations, markets,
products and services, as well as the Company's audited financial
statements.
Please use this opportunity to take part in the affairs of the
Company by voting on the business to come before this meeting. Whether
or not you plan to attend the meeting, please complete, sign, date and
return the accompanying proxy in the enclosed postage-paid envelope.
Returning the proxy does NOT deprive you of your right to attend the
meeting and to vote your shares in person for the matters to be acted
upon at the meeting.
We look forward to seeing you at the Annual Meeting.
/s/ Lew Jenkins /s/ Timothy A. Dreisbach
LEW JENKINS TIMOTHY A. DREISBACH
Chairman of the President and
Board of Directors Chief Executive Officer
-1-
<PAGE>
PREMENOS TECHNOLOGY CORP.
1000 Burnett Avenue
Concord, California 94520
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To our Stockholders:
The Annual Meeting of Stockholders of the Company will be held on
Thursday, May 29, 1997, at 1:00 p.m., at the Hilton Hotel, located at
1970 Diamond Boulevard, Concord, California, for the following purposes:
1. To elect two Class II members of the Board of Directors to
serve for the ensuing year;
2. To increase the number of shares available for grant pursuant to the
Company's 1995 Incentive Stock Program by 2,000,000 shares;
3. To ratify the appointment of Coopers & Lybrand L.L.P. as independent
public accountants for the Company for the current fiscal year; and
4. To transact any other business that may properly come before the
meeting.
Stockholders of record at the close of business on April 10, 1997
will be entitled to notice of and to vote at the Annual Meeting and at
any continuation or adjournment thereof.
By Order of the Board of Directors
/s/ David R. Schellhase
DAVID R. SCHELLHASE
General Counsel
Concord, California
April 29, 1997
Whether or not you plan to attend the meeting, please complete, sign,
date and return the accompanying proxy in the enclosed postage-paid
envelope.
-2-
<PAGE>
Preliminary Copies
PROXY STATEMENT
Premenos Technology Corp.
1000 Burnett Avenue
Concord, California 94520
April 29, 1997
The accompanying proxy is solicited on behalf of the Board of
Directors (the "Board") of Premenos Technology Corp., a Delaware
corporation (the "Company"), for use at the Annual Meeting of
Stockholders of the Company (the "Annual Meeting"). The Annual Meeting
will be held on May 29, 1997, at 1:00 p.m., at the Hilton Hotel, located
at 1970 Diamond Boulevard, Concord, California. All holders of record
of Common Stock, par value $0.01 per share (the "Common Stock"), on
April 10, 1997, the record date, will be entitled to vote at the Annual
Meeting. At the close of business on the record date, the Company had
11,713,692 shares of Common Stock outstanding and entitled to vote. A
majority, or 5,856,847, of these shares of Common Stock will constitute
a quorum for the transaction of business at the Annual Meeting. This
Proxy Statement, the accompanying proxy, and the Company's Annual Report
were first mailed to stockholders on or about April 29, 1997. The
Company's Annual Report contains the information required by Rule 14a-3
of the Rules of the Securities and Exchange Commission (the "SEC").
VOTING RIGHTS AND SOLICITATION OF PROXIES
Stockholders are entitled to one vote for each share of Common Stock
held. Shares of Common Stock may not be voted cumulatively.
Any person signing a proxy in the form accompanying this Proxy
Statement has the power to revoke it either before the meeting at which
the matter voted by proxy is acted upon or at the meeting before the
vote on the matter. A proxy may be revoked by a later proxy that is
signed by the person who signed the earlier proxy and presented at the
meeting or by attendance at the meeting and voting in person.
The expense of printing and mailing proxy material will be borne by
the Company. In addition to the solicitation of proxies by mail,
solicitation may be made by certain directors, officers, and other
employees of the Company by personal interview, telephone, or facsimile.
No additional compensation will be paid for such solicitation. The
Company also has retained Boston EquiServe, L.P. to assist in the
solicitation of proxies. Boston EquiServe, L.P. will receive a fee for
such services of approximately $2,750 plus out-of-pocket expenses, which
will be paid by the Company. The Company will request brokers and
nominees who hold shares of Common Stock in their names to furnish proxy
material to beneficial owners of the shares and will reimburse such
brokers and nominees for their reasonable expenses incurred in
forwarding solicitation materials to such beneficial owners.
PROPOSAL NO. 1 ELECTION OF CLASS II DIRECTORS
Pursuant to the Company's Bylaws, the Board of Directors consists of
six directors and is divided into three classes, with members of each
class having a term of three years. At the Annual Meeting, the
stockholders will elect two Class II directors to hold office until 2000
and until successors have been duly elected and qualified or until any
such director's earlier resignation or removal. Shares represented by
the accompanying proxy will be voted for the election of the two
nominees recommended by the Board of Directors, unless the proxy is
marked in such a manner as to withhold authority to vote or as to vote
for one or more alternate candidates. If any nominee for any reason is
unable to serve or will not serve, the proxies may be voted for such
substitute nominee as the proxyholder may determine. The Company is not
aware of any nominee who will be unable to or for good cause will not
serve as a director.
-3-
<PAGE>
Class II Directors Standing for Election
The following incumbent Class II directors are being nominated for
reelection to the Board: David Hildes and Francis Wagner.
Required Vote
Directors are elected by a plurality of votes cast. Votes withheld
and broker non-votes are not counted toward a nominee's total.
The Board of Directors recommends a vote
for the election of each of the nominated directors.
Mr. Hildes, 46, has been Vice Chairman and Secretary and a Director
of the Company since its organization in July 1995. Mr. Hildes has also
been a Director and, until July 1995, the Treasurer of Premenos Corp.
since the organization of Premenos Corp. in October 1989, and Vice
Chairman and Secretary since July 1995. Mr. Hildes was a member of the
Board of Directors of Apparel Computer Systems, Inc. ("ACS"), a
predecessor to certain of the operations of Premenos Corp., since he co-
founded ACS with Lew Jenkins in 1978. From March 1990 until March 1992,
Mr. Hildes served as Vice President of Market Development of ACS
Software Products Group, a developer and marketer of software systems to
the apparel industry.
Mr. Wagner, 48, has been a Director of the Company since its
organization in July 1995. Mr. Wagner served as a member of the Board
of Directors of Premenos Corp. since its organization from October 1989
to July 1995. Mr. Wagner was a member of the Board of Directors of ACS
from 1987 through 1989. Mr. Wagner is a principal of Prism, Ltd., a
management consulting firm which he founded in April 1986. Prior to
founding Prism, Ltd., and since 1982, Mr. Wagner was a partner and
director of Keilty, Goldsmith and Boon, a management consulting firm.
Class I and Class III Directors
The Class I directors, whose terms end in 1999, are William Studeman
and Timothy Dreisbach. The Class III directors, whose terms end in
1998, are Lew Jenkins and Stephan Mallenbaum.
Mr. Dreisbach, 47, has been President and Chief Executive Officer
and a Director of the Company since January 1997. From April 1992 until
December 1996 he was Senior Vice President of North American Field
Operations for Boole & Babbage, Inc. Previously, Mr. Dreisbach was
employed by Legent Corporation, from 1989 until 1991 as Vice President
and General Manager of the Systems Productivity Division. From 1986
until 1989, he was Vice President of Sales of Duquesne Systems, Inc., a
predecessor to Legent Corporation.
Mr. Jenkins, 49, has been Chairman of the Board and a Director of
the Company since its organization in July 1995. Mr. Jenkins has also
been Chairman and a Director of Premenos Corp. since its organization in
October 1989. Mr. Jenkins was also the Chief Executive Officer of
Premenos Corp. until August 1991. Mr. Jenkins was a member of the Board
of Directors of Apparel Computer Systems since he founded ACS in 1978.
Mr. Jenkins was the President of ACS from 1978 through 1988, when he was
named Chairman and Chief Executive Officer of ACS. Mr. Jenkins was also
the President of, and a member of the Board of Directors of, ACS
Network, the general partner of Apparelnet Investors, which was a
predecessor to certain operations of Premenos Corp., from its
organization in 1987 through its reorganization into Premenos Corp. in
1989.
Mr. Mallenbaum, 41, has been a Director of the Company since its
organization in July 1995. Mr. Mallenbaum served as a member of the
Board of Directors of Premenos Corp. from February 1990 to July 1995.
Mr. Mallenbaum is a member of the law firm of Bryan Cave LLP, counsel to
the Company and is the leader of its Technology Transactions Group. Mr.
Mallenbaum has been engaged in the private practice of law for over 15
years.
-4-
<PAGE>
Adm. Studeman, 57, has been a director of the Company since January
1996. Adm. Studeman has been Vice President and Deputy General Manager
of the Systems Integration Group of TRW Inc. since September 1996, and
Vice President for the Intelligence Business Area of TRW since March
1997. Adm. Studeman was a national security and management consultant
from September 1995 until September 1996. From April 1992 until July
1995 he was Deputy Director of Central Intelligence, and from August
1988 until April 1992 he was Director of the National Security Agency.
His other flag assignments included an assignment as the Director of
Long Range Planning and Director of Naval Intelligence. Adm. Studeman is
a member of the board of a number of government and private entities,
and is also a director of Thiokol Corporation.
Director Compensation
The Company currently does not provide cash compensation to members
of the Board of Directors for their service as directors. The Company
has engaged the consulting services of certain members of its Board of
Directors from time to time. Currently, Mr. Hildes provides consulting
services to the Company. Mr. Hildes is not compensated for his
services. Mr. Wagner and Mr. Studeman also provided consulting services
to the Company during fiscal year 1996. Mr. Mallenbaum is a member of a
law firm that provides legal services to the Company. See -
"Transactions and Legal Actions Involving Management."
Non-employee members of the Board also participate in the Premenos
Technology Corp. Incentive Program, which provides for grants of options
to purchase 5,260 shares of Common Stock of the Company on January 2 of
each year at an exercise price equal to the fair market value of the
Common Stock on the date of grant.
Board of Directors' Meetings and Committees
The Board of Directors met nine times during fiscal year 1996. The
standing committees of the Board currently are the Strategic Planning
Committee, the Audit Committee and the Compensation and Option
Committee. Each director has attended at least 75% of all Board
meetings.
Messrs. Jenkins and Hildes are presently the members of the
Strategic Planning Committee. The Strategic Planning Committee did not
meet separately from the Board of Directors during fiscal year 1996.
Matters within the purview of this Committee were considered by the
whole Board of Directors. The function of the Strategic Planning
Committee is to oversee the Company's strategic planning, long-term
positioning and corporate goals and review and approve the uses of the
net proceeds from the Company's initial public offering of Common Stock.
Messrs. Hildes and Mallenbaum are presently the members of the Audit
Committee. The Audit Committee met twice during fiscal year 1996. The
function of the Audit Committee is to review financial and auditing
practices of the Company, including the Company's choice of independent
public accounting firms, and to make recommendations to the Board of
Directors.
Messrs. Hildes and Wagner and Adm. Studeman are presently the
members of the Compensation and Option Committee. The Compensation and
Option Committee did not meet during fiscal year 1996, but during that
same period acted four times by unanimous written consent. The function
of the Compensation and Option Committee is to review and set the
compensation of the Company's Chief Executive Officer and certain of its
most highly compensated officers, including salary, bonuses and other
incentive plans, stock options, and other forms of compensation, and to
review and administer the Company's option and incentive programs and
determine stock option grants.
-5-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth certain information, as of April 3,
1997, with respect to the beneficial ownership of the Company's Common
Stock by: (i) each stockholder known by the Company to be the beneficial
owner of more than 5% of the Company's Common Stock; (ii) each director;
(iii) each executive officer named in the Summary Compensation Table;
and (iv) all current executive officers and directors as a group.
<TABLE>
Amount and
Nature of
Beneficial Percent
Name and Address of Beneficial Owner Ownership(1) of Class
- ------------------------------------ ------------ --------
<S> <C> <C>
Lew Jenkins(2) 5,094,159 43.5
1000 Burnett Avenue, Concord, CA 94520
David Hildes(3) 2,380,401 20.3
1000 Burnett Avenue, Concord, CA 94520
T. Rowe Price(4) 1,370,000 11.7
100 East Pratt St., Baltimore, MD 21202
Timothy A. Dreisbach(5) 450,000 3.8
Francis R. Wagner(6) 33,880 *
Stephan J. Mallenbaum(7) 33,794 *
H. Ward Wolff(8) 33,516 *
Gerry Diamond 15,896 *
William O. Studeman(9) 11,520 *
Richard A. Ludlow(10) 2,466 *
All current executive officers and directors
as a group (9 persons)(11) 5,218,765 44.6
- ----------------------------
*Less than 1%
</TABLE>
(1) Unless otherwise indicated below, each person listed had sole
voting and sole investment power with respect to all shares
beneficially owned, subject to community property laws where
applicable.
(2) Includes 2,380,401 shares of Common Stock held by Mr. Hildes (of
which 30,874 are options to purchase shares of Common Stock
currently exercisable and of which 105,000 shares have been
transferred by Mr. Hildes to a charitable remainder trust of which
Mr. Hildes and his wife are income benficiaries) over which Mr.
Jenkins has sole voting control pursuant to a voting agreement
between Messrs. Jenkins and Hildes. The voting agreement
terminates under certain circumstances, including the death of Mr.
Jenkins. The termination of the voting agreement could result in a
change-in-control of the Company.
(3) Includes 30,874 shares subject to currently exercisable options and
includes 105,000 shares transferred to a charitable remainder trust
of which Mr. Hildes and his wife are income beneficiaries. See
Note (2) concerning the voting agreement between Mr. Hildes and Mr.
Jenkins.
-6-
<PAGE>
(4) Includes securities owned by various individual and institutional
investors for whom T. Rowe Price Associates, Inc. ("Price
Associates") serves as investment advisor with the power to vote
the securities. For purposes of the reporting requirements of the
Securities Exchange Act of 1934, Price Associates is deemed to be a
beneficial owner of such securities; however, Price Associates
disclaims beneficial ownership of such securities.
(5) Includes 450,000 shares subject to options, none of which is
currently exercisable or exercisable within 60 days.
(6) Includes 31,380 shares subject to currently exercisable options or
options exercisable within 60 days.
(7) Includes 29,794 shares subject to currently exercisable options or
options exercisable within 60 days.
(8) Includes 31,820 shares subject to currently exercisable options or
options exercisable within 60 days.
(9) Includes 10,520 shares subject to currently exercisable options or
options exercisable within 60 days.
(10) Includes 2,466 shares subject to options, none of which is
currently exercisable or exercisable within 60 days.
(11) Includes all shares described in notes (2)-(10) above except those
shares described in notes (4), (5) and (10) above.
-7-
<PAGE>
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table provides certain summary information concerning
compensation paid by the Company to the Company's Chief Executive
Officer and each of the four other most highly compensated executive
officers of the Company (determined as of December 31, 1996)
(hereinafter referred to as the "named executive officers") for the
fiscal years ended December 31, 1996, 1995 and 1994:
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term
Compensation
Awards
------------------- ----------------
Other All
Name and Annual Options/ Other
Principal Position Year Salary Bonus Comp. SARs (2) Comp.
- --------------------- ---- -------- -------- ------ ------- ------
<S> <C> <C> <C> <C> <C> <C>
Lew Jenkins
Chairman of the Board
1996 $200,000 $ 75,000 $6,000 0 $1,484
1995 $181,250 $100,000 $6,000 0 $1,444
1994 $150,000 $125,000 $6,000 13,150 $1,450
Daniel M. Federman
Former President
and Chief Executive
Officer(4)
1996 $150,000 $ 0 $6,000 0 $8,048 (5)
Richard A. Ludlow
Senior Vice President
of Sales(6)
1996 $116,849 $ 98,431 $2,750 60,000 $22,517 (7)
H. Ward Wolff
Senior Vice President
of Finance and
Administration and
Chief Financial
Officer
1996 $140,720 $ 35,000 $2,750 29,633 $ 5,235 (3)
1995 $122,000 $ 20,000 $ 0 0 $ 1,525
1994 $109,500 $ 24,650 $ 0 5,917 $ 713
Gerry Diamond
Senior Vice
President of
Emerging Markets(9
1996 $ 91,709 $ 19,000 $4,040 75,000 $ 570
</TABLE>
(1) All figures in this column reflect reimbursement for car-related
expenses.
(2) All figures in this column reflect options to purchase Common
Stock.
(3) Except where otherwise noted, consists of Company contributions to
the employee's 401(k) account or foreign equivalent.
(4) Mr. Federman resigned as President, Chief Executive Officer and
Director in October 1996, but remained employed by the Company as a
consultant until December 31, 1996.
(5) For 1996, includes $4,256 in insurance premiums paid by the
Company, $1,484 in Company contributions to Mr. Federman's 401(k)
account and $2,308 in payment for accrued but unused vacation time.
Includes insurance premiums paid by the Company in the amount of
$3,717 and $3,305 and Company contributions of $1,444 and $1,450 to
Mr. Federman's 401(k) account in the years 1995 and 1994,
respectively.
(6) Mr. Ludlow became Senior Vice President of Sales in July 1996. Mr.
Ludlow resigned as Senior Vice President of Sales on April 4, 1997,
and will receive in connection therewith payments of approximately
$122,000, as well as continuation of his medical benefits for a
period no greater than six months following his resignation.
(7) Includes $14,192 in commissions earned during 1996 but paid in
1997, $792 in Company contributions to Mr. Ludlow's 401(k) account
and $7,533 in payment for accrued but unused vacation time.
-8-
<PAGE>
(8) For 1996, includes $1,802 in Company contributions to Mr. Wolff's
401(k) account and $3,433 in payment for accrued but unused
vacation time.
(9) Mr. Diamond became Senior Vice President of Emerging Markets in May
1996.
Stock Options
The table below sets forth information concerning the grant of stock
options to each of the named executive officers in fiscal year 1996.
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
Individual Grants(1)
Name Number of Percent of Exercise Expiration Potential Realizable
Securities Total or Base Date Value at Assumed
Underlying Options/ Price Annual Rates of
Options/ SARS Stock Price
SARS Granted to Appreciation for
Granted Employees Option Term
in Fiscal 5% 10%
Year 1996
---------- ---------- -------- ---------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Lew Jenkins 0 - - - - -
Daniel M. Federman 0 - - - - -
Richard A. Ludlow 20,000 2.2 $16.50 02/06/06 $207,535 $ 525,935
40,000 4.4 $10.25 08/01/06 $257,847 $ 653,434
H. Ward Wolff 14,633 1.6 $16.50 02/06/06 $151,843 $ 384,800
15,000 1.7 $10.25 08/01/06 $ 96,693 $ 245,038
Gerry Diamond 75,000 8.3 $19,375 05/14/06 $914,179 $2,316,892
</TABLE>
(1) All options were granted pursuant to the Company's Incentive Program
at fair market value on the date of grant. The options vest as to one
quarter of the grant on the first anniversary of the date of grant, and
vest thereafter in thirty-six equal amounts monthly following the first
anniversary of the date of grant.
The following table sets forth information with respect to the
named executive officers concerning exercises of options during fiscal
year 1996 and unexercised options held as of the end of fiscal year
1996:
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year and
Fiscal Year-End Option/SAR Values
Name Shares Value Securities Value of
Acquired on Realized Underlying Unexercised
Exercise Options/SARs in-the-Money
at Fiscal Options/SARs
Year End at Fiscal
Year End
----------- ---------- ------------ -------------
<S> <C> <C> <C> <C>
Lew Jenkins 13,150 $ 253,035 0/0 0/0
Daniel M. Federman 375,000 $4,099,326 160,863/0 $1,317,859/0
Richard A. Ludlow 27,484 $ 529,466 1,167/64,799 0/17,521
H. Ward Wolff 5,000 $ 109,297 34,450/32,921 209,814,23,361
Gerry Diamond 0 $ - 0/75,000 0/0
</TABLE>
Compensation Committee Interlocks and Insider Participation
The Compensation and Option C ommittee currently consists of
Messrs. Hildes and Wagner and Adm. Studeman. None of the Compensation
and Option Committee members or Named Executive Officers has any
relationships which must be disclosed under this caption.
-9-
<PAGE>
Notwithstanding anything to the contrary set forth in any of the
Company's previous or future filings under the Securities Act of 1933 or
the Securities Exchange Act of 1934 (the "Exchange Act") that might
incorporate this Proxy Statement or future filings with the Securities
and Exchange Commission, in whole or in part, the following report and
the Performance Graph which follows shall not be deemed to be
incorporated by reference into any such filing.
Report of the Compensation and Option Committee of the Board of
Directors on Executive Compensation
Membership and Role of the Compensation and Option Committee
The Compensation and Option Committee (the "Committee") consisted
during fiscal year 1996 of Messrs. Hildes and Wagner and Adm. Studeman,
each of whom was a non-employee member of the Company's Board of
Directors.
The Committee reviews and determines the Company's executive
compensation objectives and policies and administers the Company's stock
plans. The Committee reviews and sets the compensation of the Company's
Chief Executive Officer and certain of its most highly compensated
executive officers.
Compensation Program
- --------------------
Objectives
The Objectives of the Company's executive compensation program are to:
* Attract and retain highly talented and productive executives;
* Provide incentives for superior performance by paying compensation
at levels comparable to companies with whom the Company competes
for executive talent, some of which are significantly larger than
the Company; and
* Align the interests of the executive officers with the interests of
the Company's stockholders by basing a significant portion of
compensation upon the Company's performance.
Components
The Company's executive compensation program combines the following
three components, in addition to the benefit plans offered to all
employees: base salary (including cash provided for automobile
allowances); annual performance bonus; and long-term incentive
compensation consisting of stock option grants.
It is the Company's policy to set base salary levels, annual
performance bonuses and long-term incentive compensation at levels to
be competitive with corporations with whom the Company competes for
executive talent and factoring in other criteria necessary to attract,
reward and retain highly qualified employees. The Company also
compares its compensation to other corporations, selecting such
corporations on the basis of a number of factors, such as their size
and complexity, the nature of their businesses, the regions in which
they operate, the structure of their compensation programs (including
the extent to which they rely on bonuses and other contingent
compensation) and the availability of compensation information. The
corporations with whom the Company compares its compensation are not
necessarily those included in the indices used to compare the
stockholder return in the Stock Performance Chart. Further, the
corporations selected for such comparison may vary from year to year
based upon market conditions and changes in both the Company's and the
comparative corporations' businesses over time. In addition, the
Company has from time to time engaged compensation consultants to
evaluate its compensation programs, including its executive compensation
programs. The Company believes that its compensation levels are
-10-
<PAGE>
necessary to attract and retain high caliber executives necessary for
the successful conduct of the Company's business in a market for
executive talent that is increasingly competitive.
Each component of the Company's executive compensation program
serves a specific purpose in meeting the Company's objectives.
Base salary. The Committee annually reviews the salaries of the
Company's executives. When setting base salary levels, in a manner
consistent with the objectives outlined above, the Committee considers
competitive market conditions for executive compensation, Company
performance and individual performance.
The measures of individual performance considered in setting fiscal
year 1996 salaries included, to the extent applicable to an individual
executive officer, a number of quantitative and qualitative factors such
as the Company's historical and recent financial performance in the
principal area of responsibility of the officer, the individual's
progress toward non-financial goals within his area of responsibility,
individual performance, experience and level of responsibility and other
contributions made to the Company's success. The Committee has not
found it practicable, nor has it attempted, to assign relative weights
to the specific factors used in determining base salary levels, and the
specific factors used may vary among individual officers. As is typical
for most corporations, payment of base salary is not conditioned upon
the achievement of any specific, pre-determined performance targets.
Annual performance bonus. The Company's cash bonus program seeks to
motivate executives to work effectively to achieve the Company's
financial performance and other objectives and to reward them when
objectives are met. Executive bonus payments are based upon a
combination of achievement of Company financial goals relating to
revenues and profitability and particular objectives of the individual
officers.
Long-term incentive compensation. The Company believes that option
grants (1) align executive interests with stockholder interests by
creating a direct link between compensation and stockholder return, (2)
give executives a significant, long-term interest in the Company's
success, and (3) help retain key executives in a competitive market for
executive talent.
The Premenos Technology Corp. Incentive Program authorizes the
Committee to grant stock options to executives. Option grants are made
from time to time to executives whose contributions have or will have a
significant impact on the Company's long-term performance. The
Company's determination of whether option grants or adjustments to
option grants are appropriate each year is based upon individual
performance measures established for each individual, as well as market
conditions and other economic factors. Options are not necessarily
granted to each executive during each year. Generally, though not
always, options granted to executive officers vest either in equal
annual installments or vest as to one quarter of the total number of
options one year from the date of grant and then ratably each month
thereafter. Options generally expire ten years from the date of grant.
Benefits. The Company believes that it must offer a competitive
benefit program to attract and retain key executives. During fiscal
year 1996 the Company provided medical and other benefits to its
executive officers that are generally available to the Company's other
employees.
Compensation of the Chief Executive Officer. Mr. Dreisbach, the
Company's Chief Executive Officer and President, was recruited to join
the Company during fiscal year 1996, and his compensation plan was
structured principally in response to market demand for senior executive
talent. In the process of recruiting Mr. Dreisbach, the Company
conducted extensive research concerning chief executive officer
compensation. The Chief Executive Officer's compensation plan includes
the same elements and performance measures as the plans of the Company's
other senior executives. The Compensation Committee believes that Mr.
Dreisbach, as President and Chief Executive Officer, significantly and
directly influences the Company's overall performance. The Compensation
Committee believes that Mr. Dreisbach's total compensation reflects the
unique contributions that he will make to the Company's long-term
-11-
<PAGE>
strategic performance, as well as the competitive market for executive
talent in the software industry. The Committee determines Mr.
Dreisbach's salary on the basis of the factors discussed above, and the
Committee believes that such amounts are appropriate based upon the
Company's financial performance, including earnings per share, revenue
growth, cash flow from operations, product positioning and other
relevant factors.
Submitted by: David Hildes
Francis Wagner
William Studeman
Stock Performance Chart
The graph below compares the cumulative total stockholder return on
the Company's Common Stock with the cumulative total return on the
Standard & Poor's 500 Index and the Hambrecht & Quist ("H&Q") Technology
Index since the Company's initial public offering on September 20, 1995,
assuming an investment of $100 and reinvestment of any dividends. The
Company did not pay a dividend during fiscal year 1996 and does not
anticipate paying a dividend in the foreseeable future, and therefore no
dividend reinvestment is factored into the Company's line on the graph.
The comparisons in the graph below are based upon historical data
and are not necessarily indicative of, nor intended to forecast, future
performance of the Company's Common Stock, nor does it reflect events
subsequent to year-end 1996.
<TABLE>
<CAPTION>
Cumulative Total Return
9/20/95 12/95 12/96
------- ----- -----
<S> <C> <C> <C> <C>
Premenos Technology Corp. PRMO 100 147 48
S & P 500 1500 100 106 130
H & Q Technology IHQT 100 95 114
</TABLE>
Transactions and Legal Actions Involving Management
The law firm of Bryan Cave, LLP provided legal services to the
Company during 1996. Mr. Mallenbaum, a director of the Company, is a
member of Bryan Cave LLP.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act requires the Company's officers
and directors and persons who own more than 10% of the Company's Common
Stock (collectively, "Reporting Persons") to file reports of ownership
and changes in ownership with the SEC and NASDAQ. Reporting Persons are
required by SEC 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 or
written representations from Reporting Persons, the Company believes
that with respect to the fiscal year ended December 31, 1996 all the
Reporting Persons complied with all applicable filing requirements.
PROPOSAL NO. 2 INCREASE IN NUMBER OF AUTHORIZED SHARES FOR
1995 INCENTIVE STOCK PROGRAM
At the Annual Meeting, the stockholders are being asked to approve
the adoption of an amendment to the Company's 1995 Incentive Stock
Program, as amended (the "Incentive Program"), as adopted by the Board
of Directors, which increases the number of shares reserved for issuance
thereunder by a total of 2,000,000 shares of Common Stock (the
"Additional Shares").
-12-
<PAGE>
The Incentive Program is intended to provide additional compensation
and incentive to eligible individuals whose present and potential
contributions are important to the continued success of the Company, to
afford such persons an opportunity to acquire a proprietary interest in
the Company and to enable the Company to continue to attract and retain
the best available talent for the successful conduct of its business.
In addition to grants made pursuant to the Incentive Program, the
Company may from time to time authorize option grants not pursuant to
the terms of the Incentive Program.
Required Vote
Approval of the adoption of the amendment to the Incentive Program
requires the affirmative vote of the holders of a majority of shares of
Common Stock present or represented and casting votes at the Annual
Meeting. Abstentions and broker non-votes will be counted as present
for purposes of determining whether a quorum is present, and broker non-
votes will not be treated as entitled to vote on this matter at the
Annual Meeting.
The Board of Directors recommends a vote for approval
of the amendment to the 1995 Incentive Stock Program.
Plan Activity
As of December 31, 1996, options to purchase an aggregate of
869,315 shares of Common Stock issued under the Incentive Program had
been exercised, and options to purchase 1,315,398 shares were
outstanding. Without taking into account the proposed amendment to the
Incentive Program, 445,287 shares remained available for future grants
as of December 31, 1996.
The table under the caption "Option/SAR Grants in Last Fiscal Year"
provides information with respect to the grant of options under the
Incentive Program to the Chief Executive Officer and the next four most
highly compensated executive officers during fiscal year 1996. The
following table sets forth additional information with respect to
options granted under the Incentive Program during fiscal year 1996 to
certain groups:
<TABLE>
<CAPTION>
Identity of Weighted Average
Group Exercise Price Options Granted
---------------- ---------------
<S> <C> <C>
All executive officers $14.64 239,633
as a group (6 persons)
Non-executive officer $13.86 687,487
employees as a group
(approximately 270 persons)
</TABLE>
Description of the Incentive Program and Option Terms
The following is a summary of the principal provisions of the
Incentive Program, but it is not intended to be a complete description
of all of the terms and provisions of the Incentive Program. A copy of
the Incentive Program will be furnished to any stockholder upon written
request to the Corporate Secretary of the Company at the principal
executive offices of the Company in Concord, California.
History. The Incentive Program was adopted by the Company's Board
of Directors in 1995 and was approved by the Company's stockholders at
the same time, and a total of 2,630,000 shares of the Company's Common
Stock were reserved for issuance thereunder, including certain grants
made pursuant to predecessor stock option programs.
Purpose. The purpose of the Incentive Program is to provide
additional compensation and incentive to eligible employees, officers,
directors, advisors and consultants whose present and potential
-13-
<PAGE>
contributions are important to the continued success of the Company, to
afford such persons an opportunity to acquire a proprietary interest in
the Company and to enable the Company to continue to enlist and retain
the best available talent for the successful conduct of its business.
Administration. The Incentive Program is currently administered
by the Compensation and Options Committee of the Board of Directors
(the "Committee"). Subject to the terms of the Incentive Program, the
Committee determines the persons who are to receive awards, the number
of shares subject to each award, the terms and conditions of such awards
and the dates of grants. The Committee also has the authority to
construe and interpret any of the provisions of the Incentive Program or
any options granted thereunder. Such interpretations are binding on the
Company and on the participants.
Eligibility. All officers, directors, employees, advisors and
consultants of the Company (or any subsidiary or affiliate of the
Company) are eligible to receive awards under the Incentive Program.
Approximately 250 full-time employees are eligible to receive options
under the Incentive Program.
Option Awards. Both incentive stock options ("ISOs"), as defined in
Section 422(b) of the Code, and nonqualified stock options ("NQSOs"),
may be granted under the Incentive Program. The Committee determines
whether an option granted under the Incentive Program will be an ISO or
a NQSO. The Incentive Program limits the aggregate fair market value
(determined as of the time the option is granted) of the shares with
respect to which ISOs are exercisable for the first time by the optionee
during any calendar year to not more than $100,000. There is no similar
limit on NQSOs granted under the Incentive Program.
Other Awards. In addition to stock options, certain other awards
may be granted under the Incentive Program, although no such rights or
awards have been granted to date under the Incentive Program. The
Committee may grant Stock Appreciation Rights ("SAR") together with
related options, entitling the holder upon exercise to receive an amount
in any combination of cash or Common Stock (as determined by the
Committee) equal in value to the excess of the fair market value of the
shares covered by such SAR on the date of exercise over the aggregate
exercise price of the related option for such shares. The Committee may
also grant rights to purchase stock, including Restricted Stock Grants,
under such terms and conditions as it may determine. In addition, the
Committee may grant stock bonus awards payable in cash or Common Stock
based upon reasonable performance criteria the Committee deems
appropriate.
Director Options. Pursuant to the Incentive Program, on January 2
(or the next suceeding business day) of each year, each non-employee
director of the Company is automatically awarded a grant of 5,260 stock
options at an exercise price per share equal to the fair market value
per share of the Common Stock on such date (the "Director Options").
All Director Options are NQSOs, and all vest immediately upon the date
of grant. The Director Options expire ten years from the date of grant,
and terminate automatically two years after the grantee ceases to be a
director of the Company, unless the director is removed for cause, in
which case the Director Options terminate ten days after such removal.
Terms of the Options. Each option granted pursuant to the Incentive
Program is evidenced by a stock option grant (the "Grant") issued by the
Company. An exercise notice and agreement (the "Exercise Notice") is to
be completed by the optionee at the time an option is exercised. The
Company does not receive any consideration from an optionee at the time
an option is granted. The form of the Grant and the Exercise Notice may
be amended by the Committee from time to time, subject to the terms of
the Incentive Program.
Subject to the provisions of the Incentive Program, the Committee
may determine the vesting schedule of each option and other terms and
conditions of exercisability. Options granted under the Incentive
Program typically vest as to one-quarter of the grant total at the first
anniversary of the grant, and then in equal monthly installments
thereafter, although vesting of an option is set by and may be
accelerated by the Committee. The Committee also has the discretion to
modify, extend or renew outstanding awards and to issue new awards in
exchange for surrender of outstanding awards. The Committee also may
-14-
<PAGE>
cause the Company to purchase for cash or shares of Common Stock any
option issued under the Incentive Program.
Generally, ISOs and NQSOs granted under the Incentive Program must
be exercised within ten years of the option grant date. Any ISO granted
to a person owning 10% or more of the total combined voting power of all
classes of stock of the Company or of any subsidiary of the Company (a
"Ten Percent Stockholder") must be exercised within five years of the
option grant date.
The Committee determines the exercise price of each option granted,
which is set forth in the Grant. Under the Incentive Program, the
exercise price of a NQSO granted to an employee may be less than the
fair market value per share of the Company's Common Stock on the date
the option is granted. In the case of an ISO, or in the case of an NQSO
granted to a person other than an employee, the price shall be no less
than 100% of the fair market value of a share of Common Stock at the
time such option is granted, subject to certain conditions set forth in
the Incentive Program; provided that, in the case of an ISO granted to a
ten percent stockholder, the price shall be no less than 110% of the
fair market value of the Common Stock on the date the option is granted.
The exercise price of options granted under the Incentive Program,
including all applicable withholding taxes, must be paid: (1) in cash;
or (2) by surrender of shares of the Company's Common Stock owned by the
optionee for at least six months (or, in the case of payment of
withholding taxes, by having the Company withhold from the shares to be
issued upon exercise) having a fair market value on the date of
surrender equal to the exercise price of the option (or the amount of
the withholding obligation).
Nontransferability and Termination of Options. Options granted
under the Incentive Program may not be transferred by the optionee other
than by will or by the laws of descent and distribution. During the
lifetime of the optionee, an option may be exercised only by the
optionee or his or her legal representative.
If an optionee's employment or other association with the Company
or a subsidiary is terminated for any reason other than death or
disability, any outstanding option, to the extent (and only to the
extent) that it was exercisable on the date of such termination, must be
exercised by the optionee the earlier of three months following such
termination or the expiration of the option.
Capital Changes. If the number of outstanding shares of Common
Stock of the Company is changed by a stock dividend, stock split,
reverse stock split, combination, reclassification or similar change in
the capital structure of the Company without consideration, the number
of shares of Common Stock available for option grants under the
Incentive Program, the number of shares and the exercise price per share
for each outstanding option and the annual limitation noted above will
be proportionately adjusted, subject to any required action by the Board
or stockholders of the Company.
Amendment and Termination. The Committee may amend or terminate the
Incentive Program at any time and in any respect, except that the
Committee cannot, without the approval of the stockholders of the
Company, amend the Incentive Program in any manner that requires
stockholder approval pursuant to the Code or the regulations thereunder
or pursuant to Rule 16b-3 of the Exchange Act. No amendment of the
Incentive Program may adversely affect any outstanding option or
unexercised portion thereof without the optionee's written consent.
Subject to the specific terms of the Incentive Program, the Committee
may accelerate any award or option, reduce any applicable exercise price
or waive any conditions or restrictions pursuant to such award or option
at any time.
If an option granted pursuant to the Incentive Program expires or
terminates for any reason without being exercised in whole or in part,
the shares released from such option or award will again become
available for grant and purchase under the Incentive Program.
-15-
<PAGE>
Certain United States Federal Income Tax Information
General
The following is a general summary as of the date of this Proxy
Statement of the United States federal income tax consequences
associated with participation in the Incentive Program. The federal tax
laws may change and the federal, state and local tax consequences for
any participant will depend upon his or her individual circumstances.
This information may not be applicable to employees of foreign
subsidiaries or to participants who are not residents of the United
States. All participants have been and are encouraged to seek the
advice of a qualified tax advisor regarding the tax consequences of
participation in the Incentive Program. Any tax effects that accrue to
foreign employees as a result of participation in the Incentive Program
will be subject to the tax laws of the countries in which such employees
reside.
Tax Treatment of the Optionee
Incentive Stock Options. The optionee will recognize no income upon
grant of an ISO and incur no tax on its exercise unless the optionee is
subject to the alternative minimum tax described below. If the optionee
holds the stock acquired upon exercise of an ISO (the "ISO Shares") for
one year after the date the option was exercised and for two years after
the date the option was granted, the optionee generally will realize
long-term capital gain or loss (rather than ordinary income or loss)
upon disposition of the ISO Shares. This gain or loss will be equal to
the difference between the amount realized upon such disposition and the
amount paid for the ISO Shares.
If the optionee disposes of ISO Shares prior to the expiration of either
of the above required holding periods (a "disqualifying disposition"),
the gain realized upon such disposition, up to the difference between
the fair market value of the ISO Shares on the date of exercise and the
option exercise price, will be treated as ordinary income. Any
additional gain will be long-term or short-term capital gain, depending
upon whether or not the ISO Shares were held for more than one year
following the date of exercise by the optionee. A disposition of ISO
Shares for this purpose includes not only a sale or exchange, but also a
gift or other transfer of legal title (with certain exceptions). Long-
term capital gain is taxed at a maximum federal income tax rate of 28%
rather than the 39.6% maximum rate applicable to other income.
Alternative Minimum Tax. Generally, the difference between the fair
market value of stock purchased by exercise of an ISO (generally
measured as of the date of exercise) and the amount paid for that stock
upon exercise of the ISO is an adjustment to income for purposes of the
alternative minimum tax. An alternative minimum tax adjustment applies
unless a disqualifying disposition of the ISO Shares occurs in the same
calendar year as exercise of the ISO. The alternative minimum tax
(imposed to the extent it exceeds the taxpayer's regular tax) is 26% of
an individual taxpayer's alternative minimum taxable income for
alternative minimum taxable income up to $175,000 and 28% thereafter.
Alternative minimum taxable income is determined by adjusting regular
taxable income for certain items, increasing that income by certain tax
preference items and reducing this amount by the applicable
exemption amount ($45,000 in the case of a joint return, subject to
reduction under certain circumstances).
Nonqualified Stock Options. An optionee will not recognize any
taxable income at the time an NQSO is granted. However, upon exercise
of an NQSO the optionee will include in income as compensation an amount
equal to the difference between the fair market value of the shares on
the date of exercise (in most cases) and the optionee's purchase price.
The included amount will be treated as ordinary income by the optionee
and will be subject to income tax and FICA withholding by the Company
(either by payment in cash or withholding out of the optionee's salary)
if the optionee is an employee. Upon the sale of the shares by the
optionee, any subsequent appreciation or depreciation in the value of
the shares will be treated as short term or long term capital gain or
loss and will be taxable as long-term capital gain or loss if the
optionee held the shares for more than one year following exercise of
the NQSO.
Tax Treatment of Insiders. Optionees who are officers or directors
of the Company subject to Section 16(b) of the Securities Exchange Act
may be subject to special federal income tax treatment upon exercise of
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<PAGE>
their options. In general, such optionees will be subject to tax with
respect to income recognized upon exercise of their options upon the
later to occur of (1) the date such income normally would be recognized
under the principles described above, or (2) the expiration of the six-
month forfeiture period under Section 16(b), unless such an optionee
makes the election under Section 83(b) of the Internal Revenue Code to
be taxed as of the date specified in (1). The amount of income will be
measured by reference to the value of the shares acquired upon exercise
as of the applicable date. Optionees subject to this special treatment
should consult their own tax advisors for further information.
Tax Treatment of the Company
The Company will be entitled to a deduction in connection with the
exercise of an NQSO by a domestic optionee to the extent that the
optionee recognizes ordinary income provided that the deduction is not
disallowed under the provisions of Section 162(m) of the Code. The
Company will be entitled to a deduction in connection with the
disposition of ISO Shares only to the extent that the optionee
recognizes ordinary income on a disqualifying disposition of the ISO
Shares and will not be entitled to any deduction upon exercise of an
ISO.
ERISA. The Company believes that the Incentive Program is not
subject to any of the provisions of the Employee Retirement Income
Security Act of 1974.
PROPOSAL NO. 3 RATIFICATION OF SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has engaged Coopers & Lybrand L.L.P. as its principal
independent public accountants to perform the audit of the Company's
financial statements for fiscal 1997. Coopers & Lybrand L.L.P. has
audited the Company's financial statements (or those of its predecessor
entities) for the last seven fiscal years. The Board of Directors
expects that representatives of Coopers & Lybrand L.L.P. will be present
at the Annual Meeting, will be given an opportunity to make a statement
at the meeting if they desire to do so, and will be available to respond
to appropriate questions.
The Board of Directors recommends a vote for the
ratification of the selection of Coopers & Lybrand L.L.P.
STOCKHOLDER PROPOSALS
Stockholder proposals for inclusion in the Company's Proxy Statement
and form of proxy relating to the Company's 1998 Annual Meeting of
Stockholders must be received by December 1, 1997. Stockholder
proposals should be addressed to David R. Schellhase, General Counsel,
Premenos Technology Corp., 1000 Burnett Avenue, Concord, California
94520.
OTHER BUSINESS
The Board of Directors does not presently intend to bring any other
business before the meeting, and, so far as is known to the Board of
Directors, no matters are to be brought before the meeting except as
specified in the notice of the meeting. As to any business that may
properly come before the meeting, however, it is intended that proxies,
in the form enclosed, will be voted in respect thereof in accordance
with the judgment of the persons voting such proxies.
/s/ David R. Schellhase
DAVID R. SCHELLHASE
General Counsel
All stockholders are urged to complete, sign, date and return the
accompanying proxy card in the enclosed postage-paid envelope. Thank
you for your prompt attention to this matter.
<PAGE>
[proxy card - front]
PREMENOS TECHNOLOGY CORP.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 29, 1997
The undersigned hereby appoints LEW JENKINS, TIMOTHY A. DREISBACH,
H. WARD WOLFF, or any of them, each with power of substitution, as
proxies to represent the undersigned at the Annual Meeting of
Stockholders of PREMENOS TECHNOLOGY CORP., to be held on Thursday, May
29, 1997, at 1:00 p.m., at the Hilton Hotel, located at 1970 Diamond
Boulevard, Concord, California, and any adjournment thereof, and to vote
the number of shares the undersigned would be entitled to vote if
personally present on the following matters:
1. ELECTION OF CLASS II DIRECTORS
FOR all nominees listed below (except as marked to the
contrary below): / /
WITHHOLD AUTHORITY to vote for all nominees listed below: / /
Nominees: David Hildes and Francis Wagner
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below)
- ------------------------------------
2. PROPOSAL TO AMEND THE 1995 INCENTIVE STOCK PROGRAM TO INCREASE
THE NUMBER OF SHARES AVAILABLE FOR GRANT BY 2,000,000
/ /FOR / /AGAINST
3. PROPOSAL TO RATIFY THE APPOINTMENT OF INDEPENDENT PUBLIC
ACCOUNTANTS
/ /FOR / /AGAINST / /ABSTAIN
4. In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the Annual
Meeting or any adjournment thereof.
(Continued and to be signed on reverse side)
<PAGE>
[proxy card - back]
(Continued from other side)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY
WILL BE VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY WILL
BE VOTED FOR THE TWO NOMINEES FOR ELECTION, FOR AMENDMENT OF THE 1995
INCENTIVE STOCK PROGRAM AND FOR THE RATIFICATION OF THE APPOINTMENT OF
COOPERS & LYBRAND L.L.P.
PROXY INSTRUCTIONS
1. Please sign exactly as the name or names appear on stock certificate
(as indicated hereon).
2. If the shares are issued in the names of two or more persons, all
such persons should sign the proxy.
3. A proxy executed by a corporation should be signed in its name by
its authorized officers.
4. Executors, administrators, trustees, and partners should indicate
their positions when signing.
Dated:-----------------------, 1997
-----------------------
-----------------------
Signature(s)
STOCKHOLDERS ARE URGED TO DATE, MARK, SIGN, AND RETURN THIS PROXY IN THE
ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED WITHIN THE UNITED
STATES.
