SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
( ) 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
Rule 14a-11(c) or Rule 14a-12
META GROUP, 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:
not applicable
____________________________________________________________________________
(2) Aggregate number of securities to which transactions applies:
not applicable
____________________________________________________________________________
(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):
not applicable
____________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
not applicable
____________________________________________________________________________
(5) Total fee paid:
not applicable
____________________________________________________________________________
( ) 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:
not applicable
________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
not applicable
________________________________________________________________________
(3) Filing Party:
not applicable
________________________________________________________________________
(4) Date Filed:
not applicable
________________________________________________________________________
<PAGE>
META GROUP, INC.
208 Harbor Drive
Stamford, Connecticut 06912-0061
______________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 19, 1997
_______________
To the Stockholders of META Group, Inc.:
The Annual Meeting of Stockholders of META Group, Inc.(the
"Corporation"), a Delaware corporation, will be held on Monday, May 19, 1997
at 9:00 a.m., local time, at The Hyatt Regency Hotel, 1800 East Putnam
Avenue, Old Greenwich, CT 06870, for the following purposes:
(1) To elect two Class II Directors to serve for a three-year term or
until their successors are elected and qualified.
(2) To transact such other business as may properly come before the
meeting or any adjournments thereof.
Only stockholders of record at the close of business on April 1, 1997 are
entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to
mark, sign, date and return the enclosed proxy card as promptly as possible
in the postage-prepaid envelope enclosed for that purpose. Any stockholder
attending the meeting may vote in person even if such stockholder has
returned a proxy.
By Order of the Board of Directors
Bernard F. Denoyer
Secretary
Stamford, Connecticut
April 10, 1997
YOUR VOTE IS IMPORTANT.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED
STAMPED ENVELOPE BY RETURN MAIL PRIOR TO THE DATE OF THE ANNUAL MEETING OF
STOCKHOLDERS IN ORDER TO ASSURE REPRESENTATION OF YOUR SHARES.
<PAGE>
META GROUP, INC.
208 Harbor Drive
Stamford, Connecticut 06912-0061
_________________
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 19, 1997
_________________
April 10, 1997
Proxies in the form enclosed with this proxy statement are solicited
by the Board of Directors of META Group, Inc., a Delaware corporation
(the "Corporation"), for use at the Annual Meeting of Stockholders to be
held on May 19, 1997, at 9:00 a.m., local time, at The Hyatt Regency Hotel,
1800 East Putnam Avenue, Old Greenwich, CT 06830 or at any adjournments
thereof (the "Annual Meeting").
Only stockholders of record at the close of business on April 1, 1997
(the "Record Date") will be entitled to receive notice of and to vote at the
meeting and any adjournments thereof. As of that date, 7,287,347 shares of
Common Stock, $.01 par value (the "Common Stock"), of the Corporation were
issued and outstanding. The holders of Common Stock are entitled to one vote
per share on any proposal presented at the meeting. Stockholders may vote
in person or by proxy. Execution of a proxy will not in any way affect a
stockholder's right to attend the meeting and vote in person. Any
stockholder giving a proxy has the right to revoke it (i) by filing a
later-dated proxy or a written notice of revocation with the Secretary of
the Corporation at any time before it is exercised or (ii) by voting in
person at the Annual Meeting (although attendance at the Annual Meeting
will not, in itself, constitute revocation of a proxy). Any written notice
of revocation or subsequent proxy should be sent so as to be delivered to
META Group, Inc., 208 Harbor Drive, Stamford, Connecticut, 06912-0061,
Attention: Secretary, at or before the taking of the vote at the Annual
Meeting.
The representation in person or by proxy of at least a majority of
the outstanding Common Stock entitled to vote at the meeting is necessary
to constitute a quorum for the transaction of business. Votes withheld from
any nominee, abstentions and broker "non-votes" are counted as present or
represented by proxy for purposes of determining the presence or absence of
a quorum for the meeting. A "non-vote" occurs when a nominee holding shares
for a beneficial owner does not vote on a proposal because, in respect of
such proposal, the nominee does not have discretionary voting power and has
not received instructions from the beneficial owner.
In the election of the Class II Directors, the nominees receiving the
highest number of affirmative votes of the shares present or represented
and entitled to vote at the meeting shall be elected as Class II Directors.
On any other matter being submitted to stockholders, an affirmative vote of
a majority of the shares present or represented and voting on each such
matter is required for approval. An automated system administered by the
Corporation's transfer agent tabulates the votes. The vote on each matter
submitted to stockholders is tabulated separately. Abstentions are included
in the number of shares present or represented and voting on each matter.
Broker "non-votes" are not so included.
<PAGE>
The persons named as attorneys-in-fact in the proxies, Dale Kutnick
and Bernard F. Denoyer, are a director and officer and an officer of the
Corporation, respectively. All properly executed proxies returned in time
to be counted at the meeting will be voted. All proxies will be voted in
accordance with the stockholders' instructions, and, if no choice is
specified, the enclosed proxy card (or any signed and dated copy thereof)
will be voted FOR the matters set forth in the accompanying Notice of
Meeting. Any stockholder giving a proxy has the right to withhold authority
to vote for any individual nominee to the Board of Directors by writing
that nominee's name in the space provided on the proxy.
The Board of Directors of the Corporation knows of no other matters
to be presented at the meeting. If any other matter should be presented at
the meeting upon which a vote properly may be taken, shares represented by
all proxies received by the Board of Directors will be voted with respect
thereto in accordance with the judgment of the persons named as attorneys
in the proxies.
An Annual Report to Stockholders, containing financial statements for
the fiscal year ended December 31, 1996, is being mailed together with this
proxy statement to all stockholders entitled to vote. This proxy statement
and the form of proxy were first mailed to stockholders on or about April
10, 1997.
MANAGEMENT AND PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth as of the Record Date (unless otherwise
indicated) certain information regarding the beneficial ownership of shares
of the Corporation's Common Stock by (i) each person who, to the knowledge
of the Corporation, owned beneficially more than 5% of the Common Stock
of the Corporation outstanding at the Record Date, (ii) each director or
nominee,(iii) each executive officer and former executive officer
identified in the Summary Compensation Table set forth below under
"Compensation and Other Information Concerning Directors and Officers," and
(iv) all executive officers, directors and nominees as a group.
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent of
of Beneficial Owner of Ownership (1) Class (2)
___________________________________________________________________________
<S> <C> <C>
Dale Kutnick (3) 997,159 13.7%
c/o META Group, Inc.
Harbor Plaza, 208 Harbor Drive
Stamford, CT 06912
Marc Butlein (4) 934,160 12.8%
c/o META Group, Inc.
Harbor Plaza, 208 Harbor Drive
Stamford, CT 06912
Fiduciary Trust Company International (5) 618,450 8.5%
2 World Trade Center, 96th Floor
New York, NY 10048
Pilgrim Baxter & Associates, Ltd. (6) 598,100 8.2%
11255 Drummers Lane, Suite 300
Wayne, PA 19087
T. Rowe Price Associates, Inc. (7) 536,000 7.4%
100 East Pratt Street
Baltimore, MD 21202
Wilke/Thompson Capital Management (8) 409,750 5.6%
3800 Northwest Center
90 South Seventh Street
Minneapolis, MN 55402
Joaquin J. Gonzalez 208,000 2.9%
c/o World Research Advisory
1807 Michael Faraday Court, 2nd Floor
Reston, VA 20190
George McNamee (9) 203,333 2.8%
c/o First Albany Corporation
30 South Pearl Street
Albany, NY 12207
Harry S. Gruner (10) 184.288 2.5%
c/o JMI Equity Fund
1119 St. Paul Street
Baltimore, MD 21202
Joseph P. Gottlieb (11) 87,000 1.2%
c/o META Group, Inc.
Harbor Plaza, 208 Harbor Drive
Stamford, CT 06912
James J. Harrison (12) 71,000 1.0%
c/o META Group, Inc.
Harbor Plaza, 208 Harbor Drive
Stamford, CT 06912
John Aaron Zornes (13) 57,533 *
c/o META Group, Inc.
Harbor Plaza, 208 Harbor Drive
Stamford, CT 06912
Michael Simmons (14) 13,333 *
c/o SC Group, Inc.
7777 Market Center Avenue
El Paso, TX 79913
Bernard F. Denoyer (15) 9,906 *
c/o META Group, Inc.
Harbor Plaza, 208 Harbor Drive
Stamford, CT 06912
Francis J. Saldutti (16) 3,067 *
c/o Ardent Research Partners, L.P.
237 Park Avenue
New York, NY 10017
All directors and executive officers 2,580,776 34.7%
as a group (12 persons)(17)
</TABLE>
________________________
*Less than 1%
(1) Except as noted in the footnotes to this table, each person or entity
named in the table has sole voting and investment power with respect
to all shares of Common Stock owned, based upon information provided
to the Corporation by directors (and nominees), officers and principal
stockholders.
(2) Applicable percentage of ownership as of the Record Date is based upon
7,287,347 shares of Common Stock outstanding on that date. Beneficial
ownership is determined in accordance with the rules of the Securities
and Exchange Commission (the "Commission"), and includes voting and
investment power with respect to shares. Common Stock subject to options
currently exercisable or exercisable within 60 days of the Record Date
are deemed outstanding for computing the percentage ownership of the
person holding such options, but are not deemed outstanding for
computing the percentage of any other person.
(3) Includes 5,000 shares of Common Stock issuable pursuant to stock
options exercisable within 60 days after the Record Date.
(4) Includes 220,000 shares of Common Stock held by the Marc & Michele
Butlein Charitable Remainder Unitrust, of which Marc Butlein is a
Trustee.
(5) Consists of 507,950 of Common Stock for which Fiduciary Trust Company
International ("Fiduciary Trust") has sole voting power and 110,500
shares of Common Stock for which Fiduciary Trust has shared voting
power. Information included in this table regarding Fiduciary Trust
was obtained from its Schedule 13-G filed with the Commission on or
about January 28, 1997.
(6) These shares are owned by various individual and institutional
investors including PBHG Emerging Growth Fund (which owns 480,200
shares, representing 6.6% of the shares outstanding), which Pilgrim
Baxter & Associates, Ltd.("Pilgrim Baxter") serves as investment
advisor with power to direct investments and/or sole power to vote
the securities. Information included in this table regarding Pilgrim
Baxter was obtained from its Schedule 13-G filed with the Commission
on or about February 14, 1997.
(7) These shares are owned by various individual and institutional
investors, which T. Rowe Price Associates, Inc. ("Price Associates")
serves as investment advisor with power to direct investments and/or
sole power to vote the securities. Price Associates disclaims beneficial
ownership of such shares. Information included in this table regarding
Price Associates was obtained from its Schedule 13-G filed with the
Commission on or about February 14, 1997.
(8) Information included in this table regarding Wilke/Thompson Capital
Management was obtained from its Schedule 13-G filed with the Commission
on or about January 21, 1997.
(9) Consists of 200,000 shares of Common Stock owned by First Albany
Corporation and 3,333 shares issuable pursuant to stock options
exercisable within 60 days after the Record Date. Mr. McNamee, a
director of the Corporation, is Chairman and Co-Chief Executive Officer
of First Albany Corporation, and may therefore be deemed to share voting
and investment power over the shares owned by First Albany Corporation.
Mr. McNamee disclaims beneficial ownership of the 200,000 shares owned
by First Albany Corporation, except to the extent of his pecuniary
interest therein.
(10) Consists of 184,288 shares owned by JMI Equity Fund L.P. ("JMI"). Mr.
Gruner, a director of the Corporation, is a general partner of JMI
Partners, L.P., the general partner of JMI, and may therefore be
deemed to share voting and investment power over the shares owned by
JMI. Mr. Gruner disclaims beneficial ownership of the shares owned by
JMI, except to the extent of his pecuniary interest therein.
(11) Includes 70,750 shares of Common Stock issuable pursuant to stock
options exercisable within 60 days after the Record Date.
(12) Includes 31,000 shares of Common Stock issuable pursuant to stock
options exercisable within 60 days after the Record Date.
(13) Includes 6,001 shares of Common Stock issuable pursuant to stock
options exercisable within 60 days after the Record Date.
(14) Consists of 13,333 shares of Common Stock issuable pursuant to stock
options exercisable within 60 days after the Record Date.
(15) Includes 1,849 shares of Common Stock issuable pursuant to stock
options exercisable within 60 days after the Record Date and 800
shares of Common Stock held by family members. Mr. Denoyer disclaims
beneficial ownership of the shares owned by family members, except to
the extent of his pecuniary interest therein.
(16) Consists of 3,067 shares of Common Stock issuable pursuant to stock
options exercisable within 60 days after the Record Date.
(17) Includes 144,465 shares of Common Stock issuable pursuant to stock
options exercisable within 60 days after the Record Date.
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The Corporation's Board of Directors is currently fixed at six members.
The Corporation's By-laws divide the Board of Directors into three classes.
The members of each class of directors serve for staggered three-year terms.
Messrs. Dale Kutnick and Francis J. Saldutti are Class I Directors, Messrs.
Marc Butlein and Harry S. Gruner are Class II Directors, and Messrs. Michael
Simmons and George McNamee are the Class III Directors. The Class II
Directors' terms will expire at the Annual Meeting.
The Board of Directors has nominated and recommended that Messrs.
Butlein and Gruner, who currently serve as Class II Directors, be reelected
as Class II Directors, to hold office until the Annual Meeting of
Stockholders for the fiscal year ending December 31, 1999 until their
successors have been duly elected and qualified or until their earlier
resignation or removal. The Board of Directors knows of no reason why the
nominees should be unable or unwilling to serve, but if any nominee should
for any reason be unable or unwilling to serve, the proxies will be voted
for the election of such other person for the office of director as the
Board of Directors may recommend in the place of such nominee. Unless
otherwise instructed, the proxy holders will vote the proxies received by
them FOR the election of both nominees.
The following table sets forth the nominees to be elected at the
meeting and, for each director whose term of office will extend beyond the
meeting, the year such nominee or director was first elected a director, the
positions currently held by the nominees and each director with the
Corporation, the year the nominee's or director's term will expire and class
of director of each nominee and each director.
<TABLE>
<CAPTION>
Nominee's or Director's Position(s) with Year Term Class of
Name and Year Nominee or Director the Corporation Will Expire Director
First Became a Director
_________________________________ ________________ ___________ ________
<S> (C> <C> <C>
Nominees:
Marc Butlein (1989) Director 2000 II
Harry S. Gruner (1994) Director 2000 II
Continuing Directors:
Michael Simmons (1994) Director 1998 III
George McNamee (1996) Director 1998 III
Dale Kutnick (1989) President, Research 1999 I
Director, Chief Executive
Officer and Director
Francis J. Saldutti (1991) Director 1999 I
</TABLE>
<PAGE> 7
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors met six (6) times and took action by unanimous
written consent three (3) times during the fiscal year ended December 31,
1996. Each of the directors attended all of the meetings of the Board of
Directors during fiscal 1996. The Audit Committee of the Board of Directors,
of which Messrs. Gruner, Saldutti and Simmons are currently members, is
responsible for reviewing the results and scope of audits and other services
Pprovided by the Corporation's independent auditors and reviewing the
Corporation's internal controls. The Audit Committee met once on January 31,
1996. The Compensation Committee, of which Messrs. Gruner, Saldutti and
Simmons are currently members, makes recommendations concerning the salaries
and incentive compensation of employees of, and consultants to, the
Corporation and oversees and administers the Corporation's stock plans. The
Compensation Committee met twice during 1996 and took action by unanimous
written consent six (6) times. The Board of Directors does not currently
have a standing nominating committee.
OCCUPATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the director nominees to be elected at
the meeting, the directors and the executive officers of the Corporation,
their ages, and the positions currently held by each such person with the
Corporation.
Name Age Position
____ ___ ________
Dale Kutnick 47 President, Research Director, Chief Executive
Officer and Director
Bernard F. Denoyer 49 Treasurer, Vice President, Finance, Secretary
and Chief Financial Officer
Daniel S. Fitzgerald 32 Senior Vice President, Sales
Joseph P. Gottlieb 30 Executive Vice President, Marketing and
Distribution
James J. Harrison 29 Senior Vice President and Service Director
John Aaron Zornes 43 Executive Vice President and Service Director
Marc Butlein 58 Chairman of the Board
Harry S. Gruner(1) 37 Director
George McNamee 50 Director
Francis J. Saldutti(1) 49 Director
Michael Simmons(1) 58 Director
____________________
(1) Member of Compensation and Audit Committees.
Dale Kutnick, a co-founder of the Corporation, has served as
President, Chief Executive Officer and a Director of the Corporation since
its inception in January 1989. Beyond his operational responsibilities, Mr.
Kutnick directs all of META Group's research and analytic activities. He
is also Executive Director of the META Executive Council, which prepares
customized research for CIOs. Prior to co-founding META Group, Mr. Kutnick
was Executive Vice President of Research at Gartner Group and an Executive
Vice President at Gartner Securities. Prior to his experience at Gartner
Group, he served as an Executive Director, Research Director and Principal
at Yankee Group and as a Principal at Battery Ventures, a venture capital
firm. Mr. Kutnick is a graduate of Yale University.
Bernard F. Denoyer joined the Corporation in October 1994 as Vice
President, Finance and was elected Chief Financial Officer and Treasurer of
the Corporation in July 1995. In May 1996, the Board of Directors appointed
Mr. Denoyer Secretary of the Corporation. Prior to joining the Corporation,
Mr. Denoyer was an independent turnaround financial consultant from
December 1993 until September 1994, and Vice President and Chief Financial
Officer of Environetics, Inc. from May 1990 until November 1993, when
Environetics, Inc. merged with IDEXX Laboratories, Inc. Previously, Mr.
Denoyer served for three years as Vice President, Finance for Gartner Group
and held senior financial management positions with GTE and Bunker Ramo. Mr.
Denoyer earned his CPA in 1975 while at Ernst & Young. Mr. Denoyer has an
MBA in Finance from the Columbia Business School and a B.A. in Economics
from Fairfield University.
Daniel S. Fitzgerald has served as Senior Vice President of Sales since
January 1997. Previously, Mr. Fitzgerald held the positions of Regional Vice
President - East and District Sales Director within the Corporation. Prior
to joining META Group in June 1994, Mr. Fitzgerald co-founded and served as
Vice President of Sales for Affinity Research Corporation, a research and
consulting firm. From June 1992 until April 1993, Mr. Fitzgerald held the
position of Product Marketing Manager and Sales Director of New Science
Associates (later acquired by Gartner Group). Mr. Fitzgerald received a
B.B.A in Marketing from the University of Massachusetts.
Joseph P. Gottlieb has served as Executive Vice President, Marketing
and Distribution of the Corporation since January 1997. Previously, he held
positions as Executive Vice President, Sales and Marketing from January 1995
until January 1997, Vice President and Service Director of the Corporation's
Open Computing & Server Strategies service from November 1992 until January
1995, and as a Program Director in the Global Networking Strategies service
from September 1991 until November 1992. Prior to joining the Corporation
in September 1991, Mr. Gottlieb was a Manager with the Network Consulting
Practice of Ernst & Young for four years; before that, he was with Network
Strategies, Inc. Mr. Gottlieb graduated from Cornell University with a B.S.
in Electrical Engineering.
James J. Harrison has served as Senior Vice President and Service
Director of META Metrix since September 1996 and Senior Vice President of
New Product Development since January 1997. His previous experience within
the Corporation has included positions as Vice President and Service
Director of the Corporation's Services & Systems Management Strategies
service from January 1995 to April 1996 and Vice President and Program
Director of the Global Networking Strategies service prior to January 1995.
Prior to joining META Group in September 1990, Mr. Harrison was a Manager
with the Technology Consulting Practice of Ernst & Young; before that, he
was with Network Strategies, Inc. and Comcept Associates. Mr. Harrison
received a B.S. in Electrical Engineering from the Massachusetts Institute
of Technology.
John Aaron Zornes has served as Executive Vice President and Service
Director of the Corporation's Application Delivery Strategies service since
January 1996. From October 1990 until December 1995, he held the position
of Vice President and Service Director of the Application Development
Strategy service. Prior to joining META Group in October 1990, Mr. Zornes
held executive and managerial positions at Ingres Corporation, Wang
Laboratories, Inc., Software AG of North America and Cincom Systems, Inc.
Mr. Zornes received his M.S. in Management Information Systems from the
University of Arizona.
Marc Butlein, a co-founder of the Corporation, currently serves as
Chairman of the Board of Directors. Mr. Butlein held the office of Secretary
of the Corporation from January 1989 until May 1996, Executive Director of
the META Executive Council from January 1994 until June 1996 and Senior
Executive Vice President from July 1995 until his retirement as an officer
of the Corporation in December 1996. From January 1989 to April 1993, he
served as Vice President and Director of the Enterprise Data Center
Strategies service. Prior to co-founding META Group, Mr. Butlein spent three
and one-half years with Gartner Group and 19 years with International
Business Machines Corporation, where he held various marketing, development
and corporate positions.
Harry S. Gruner has served as a Director of the Corporation since
July 1994. Mr. Gruner has been a general partner of JMI Partners, L.P., the
general partner of JMI Equity Fund, L.P., a venture capital firm, since
1992. From 1986 until joining JMI Equity Fund, L.P., Mr. Gruner was a
Principal at Alex Brown & Sons Incorporated, an investment banking firm. Mr.
Gruner also serves as a Director of Hyperion Software Corporation, Brock
International, Inc., Jackson Hewitt, Inc., Optika Imaging Systems, Inc. and
V-ONE Corporation, all of which are publicly traded corporations.
George McNamee has served as a Director of the Corporation since
August 1996. Since 1984, Mr. McNamee has been the Chairman of First Albany
Companies, Inc., a publicly traded holding company, and Chairman, Co-Chief
Executive Officer and Director of First Albany Corporation, which is the
primary subsidiary of First Albany Companies, Inc. Mr. McNamee also serves
as a Director of Map Info Corporation, Mechanical Technology Inc. and Home
Shopping Network, Inc., all of which are publicly traded companies.
Francis J. Saldutti has served as a Director of the Corporation since
November 1991. Mr. Saldutti has been a general partner of Ardent Research
Partners, L.P., a venture capital firm, since April 1992 and was a senior
technology analyst at Amerindo Investment Advisors, an investment firm,
from October, 1989 through February 1995. Prior to October 1989, Mr.
Saldutti was Senior Vice President and Director of Research for Gartner
Securities, Director of Technology Research for LF Rothschild, Unterberg,
Towbin, an investment banking firm, and senior technology analyst for
Merrill Lynch Asset Management's Science/Technology Fund.
Michael Simmons has served as a Director of the Corporation since
September 1994. Mr. Simmons currently is the Chief Administrative Officer
of Security Capital Group, a real estate investment firm, and the Principal
and President of M.S. Associates, a management and technology consulting
firm. In 1993 and 1994, Mr. Simmons worked as an independent management
consultant, and from 1990 through 1993, Mr. Simmons was an Executive Vice
President at the Bank of Boston.
Executive officers of the Corporation are elected by the Board of
Directors on an annual basis and serve until their successors have been
duly elected and qualified. There are no family relationships among any of
the executive officers or directors of the Corporation.
<PAGE) 10
COMPENSATION AND OTHER INFORMATION
CONCERNING DIRECTORS AND OFFICERS
Executive Compensation Summary
The following table sets forth summary information concerning the
compensation paid or earned for services rendered to the Corporation in all
capacities during the fiscal years ended December 31, 1994, 1995 and 1996 to
(i) the Corporation's Chief Executive Officer and (ii) each of the five other
most highly compensated executive officers and former executive officers of
the Corporation who received total annual salary and bonus in excess of
$100,000 in fiscal 1996 (collectively, the "Named Executive Officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation(1) Compensation(2)
______________________________ ___________________
Other Annual Securities Underlying All Other
Name and Principal Position(1) Year Salary Bonus Compensation Options (# of shares) Compensation(1)(3)
_____________________________ ____ ______ _____ ____________ _____________________
<S> <C> <C> <C> <C> <C> <C>
Dale Kutnick 1996 $239,295 $204,447 20,000 $9,772
President, Research Director, 1995 $225,750 $125,000 $7,330
Chief Executive Officer and 1994 $215,000 $95,000 $5,424
Director
Bernard F. Denoyer 1996 $125,000 $72,200 5,000
Vice President, Finance, Chief 1995 $110,000 $40,000 1,600
Financial Officer, Treasurer 1994 $25,417 16,000
and Secretary
Joaquin J. Gonzalez 1996 $181,600
Former Executive Vice President, 1995 $185,328 $54,898
New Business Development* 1994 $179,400 $29,336
Joseph P. Gottlieb 1996 $175,000 $185,047 15,000
Executive Vice President, 1995 $150,000 $104,000 30,000
Marketing and Distribution 1994 $123,517 $96,611 16,000
James J. Harrison 1996 $133,000 $46,544 8,000
Senior Vice President and 1995 $110,000 $89,088
Service Director 1994 $93,000 $30,209
John Aaron Zornes 1996 $170,000 $195,385 8,000
Executive Vice President, 1995 $156,000 $144,385 2,000
Service Director, Application 1994 $148,500 $92,241 10,000
Delivery Strategies
</TABLE>
______________________
(1) The compensation described in this table does not include medical,
group life insurance or other benefits received by the Named Executive
Officers which are available generally to all salaried employees of the
Corporation and certain perquisites and other personal benefits,
securities or property received by the Named Executive Officers which
do not exceed the lesser of $50,000 or 10% of any such officer's
aggregate salary and bonus disclosed in this table.
(2) The Corporation did not grant any restricted stock awards or stock
appreciation rights or make any long-term incentive plan payouts during
fiscal year 1996.
(3) Consists of premiums for term life insurance paid by the Corporation for
the benefit of the Named Executive Officer.
* Mr. Gonzalez resigned as Executive Vice President - New Business
Development in December 1996 pursuant to a planned transition and was
not an executive officer on December 31, 1996.
<PAGE>
Option Grants in Fiscal Year 1996
The following table sets forth each grant of stock options made during
the year ended December 31, 1996 to each of the Named Executive Officers:
<TABLE>
<CAPTION>
Individual Grants
___________________________________________________
% of Total Potential Realizable
Number of Options Value at Assumed
Securities Granted to Annual Rates of
Underlying Employees Exercise Stock Price Appreciation
Options in Fiscal Price Expiration for Option Term(2)
Name Granted(1) Year ($/Share) Date 5%($) 10%($)
_____ __________ __________ _________ __________ _______ ______
<S> <C> <C> <C> <C> <C>
Dale Kutnick 16,000 4% $24.6125 03/05/06 $238,211 $612,572
4,000 1% $22.375 03/05/01 $34,299 $66,719
Bernard F. Denoyer 5,000 1% $22.375 03/05/06 $85,628 $202,616
Joaquin J. Gonzalez --- --- --- --- --- ---
Joseph P. Gottlieb 10,000 2% $22.375 03/05/06 $171,257 $405,233
5,000 1% $22.375 03/05/06 $85,628 $202,616
James J. Harrison 8,000 2% $22.375 03/05/06 $137,006 $324,186
John Aaron Zornes 8,000 2% $22.375 03/05/06 $137,005 $324,186
</TABLE>
______________
(1) All options reflected in the Summary Compensation Table were granted on
March 5, 1996 and vest one-fourth on March 5, 1997, an additional
one-fourth on March 5, 1998, an additional one-fourth on March 5, 1999
and fully on March 5, 2000. The exercise price of the options is $22.375
per share, the market value of the Corporation's Common Stock as
determined by the Corporation's Board of Directors on the date of grant,
except for the option to purchase 16,000 shares granted to Dale Kutnick
at a price of $24.6125 per share.
(2) Amounts reported in these columns represent amounts that may be realized
upon exercise of the options immediately prior to the expiration of
their term assuming the specified compounded rates of appreciation (5%
and 10%) on the market value of the Corporation's Common Stock over the
term of the options. These numbers are calculated based on rules
promulgated by the Commission and do not reflect the Corporation's
estimate of future stock price growth. Actual gains, if any, on stock
option exercises and Common Share holdings are dependent on the timing
of such exercises and the future performance of the Corporation's Common
Stock. There can be no assurance that the rates of appreciation assumed
in this table can be achieved or that the amounts reflected will be
received by the individuals.
<PAGE>
Aggregate Option Exercises in Fiscal Year 1996 and Fiscal Year-End Values
<TABLE>
<CAPTION>
The following table sets forth, for each of the Named Executive
Officers, information with respect to the exercise of stock options during
the year ended December 31, 1996 and the year-end value of unexercised
options:
Value(2) of Unexercised
Shares Numbers of Unexercised In-the-Money Options at
Acquired on Value Options at Year-End Year-End
Namee Exercise(#) Realized($)(1) Exercisable/Unexercisable Exercisable/Unexercisable
____ ____________ ______________ _________________________ _________________________
<S> <C> <C> <C> (c)
Dale Kutnick --- --- 400,000/20,000 $10,740,000/$56,700
Bernard F. Denoyer 5,300 $164,300 599 / 11,401 $13,509 / $180,216
Joaquin Gonzalez 60,000 $1,687,500 140,000 / 0 $3,653,500/0
Joseph P. Gottlieb 15,000 $400,200 51,666 / 40,334 $1,311,700 / $677,725
James J. Harrison 31,000 $783,050 29,000 / 8,000 $755,450 / $37,000
John Aaron Zornes 39,000 $1,111,290 0 / 12,668 0 / $152,032
_____________
(1) Amounts disclosed in this column were calculated based on the difference
between the fair market value of the Corporation's Common Stock on the date
of exercise and the exercise price of the options in accordance with
regulations promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and do not reflect amounts actually received
by the named officers.
(2) Value is based on the difference between the option exercise price and
the fair market value at December 31, 1996, the fiscal year-end ($27.00 per
share), multiplied by the number of shares underlying the option.
Stock Plans
The Corporation currently maintains five employee stock plans: the
Restated and Amended 1989 Stock Option Plan, the 1993 Stock Option and
Incentive Plan, the 1995 Stock Plan, the 1995 Non-Employee Director Stock
Option Plan and the 1995 Employee Stock Purchase Plan (collectively, the
"Stock Plans"). Following is a summary of the material features of the
Stock Plans.
The Restated and Amended 1989 Stock Option Plan (the "1989 Plan")
provides for the issuance of a maximum of 3,6000,000 shares of Common Stock
pursuant to the grant of incentive stock options ("ISOs") to employees and
non-qualified stock options ("NQSOs") to employees, consultants, directors
and officers of the Corporation. The terms of such options, including
number of shares, exercise price, duration and vesting, are generally
determined by the Compensation Committee of the Board of Directors. As of
<PAGE>
December 31, 1996, options to purchase a total of 1,168,650 shares of
Common Stock were outstanding under the 1989 Stock Plan, all of which were
then exercisable. The Corporation's Board of Directors resolved on March 3,
1993 that after that date, no further options may be granted or issued
under the 1989 Plan. Accordingly, no options were granted under the 1989
Plan during the fiscal year ended December 31, 1996.
The 1993 Stock Option and Incentive Plan (the "1993 Plan") provides for
the issuance of a maximum of 1,600,000 shares of Common Stock pursuant to
the grant of ISOs to employees and the grant of NQSOs to employees,
consultants, directors and officers of the Corporation. The terms of such
options, including number of shares, exercise price, duration and vesting,
are generally determined by the Compensation Committee of the Board of
Directors. As of December 31, 1996, options to purchase a total of 526,767
shares of Common Stock were outstanding under the 1993 Stock Plan, of which
options for 279,575 shares were then exercisable. The Corporation's Board
of Directors resolved on October 2, 1995 that after November 30, 1995 no
further options may be granted or issued under the 1993 Plan. Accordingly,
no options were granted under the 1993 Plan during the fiscal year ended
December 31, 1996.
The 1995 Stock Plan (the "1995 Plan") provides for the issuance of a
maximum of 1,500,000 shares of Common Stock pursuant to the grant of ISOs
to employees and the grant of NQSOs, stock awards and opportunities to make
direct purchases of stock to employees, consultants, directors and officers
of the Corporation. The terms of such options, including number of shares,
exercise price, duration and vesting, are generally determined by the
Compensation Committee of the Board of Directors. As of December 31, 1996,
options to purchase a total of 374,270 shares of Common Stock were
outstanding under the 1995 Plan, of which options for 25,775 shares were
then exercisable. Shares available for future stock option grants at
December 31, 1996 totaled 1,124,880 shares. During 1996, ISOs to purchase
319,570 shares of Common Stock and NQSOs to purchase 98,800 shares of Common
Stock were granted under the 1995 Plan.
The 1995 Non-Employee Director Stock Option Plan (the "Director Plan")
provides for the grant of options to purchase a maximum of 150,000 shares
of Common Stock to non-employee directors of the Corporation. The Director
Plan authorizes the automatic grant of stock options only to members of the
Board of Directors who are neither employees nor officers of the Corporation
(individually, a "Non-Employee Director" and collectively, the "Non-Employee
Directors"). The Director Plan is administered by the Compensation Committee.
The Director Plan authorizes the grant (a) to each Non-Employee Director
who is first elected to the Board after November 30, 1995, on the date such
person is first elected to the Board of Directors without further action by
the Board of Directors, of an option to purchase 10,000 shares of Common
Stock and (b) to each person who is a Non-Employee Director on each
successive one-year anniversary of the date such person was first elected
to the Board of Directors, during the term of the Director Plan, of an
option to purchase 5,000 shares of Common Stock. Options granted to newly
elected Non-Employee Directors, as described in part (a) of the preceding
sentence, vest 33 1/3% on the date of grant and an additional 33 1/3% on
each successive one-year anniversary, and options granted as described in
part (b) of the preceding sentence vest in full on the one-year anniversary
of the date of grant. The exercise price per share for all options granted
under the Director Plan is equal to 100% of the fair market value per share
of the Common Stock on the date of grant. The term of each option is for a
period of ten years from the date of grant. As of December 31, 1996, options
to purchase a total of 25,000 shares of Common Stock were outstanding under
the Director Plan, of which options for 3,333 shares were then exercisable.
Shares available for future stock option grants at December 31, 1996 totaled
125,000 shares. During 1996, NQSOs to purchase 25,000 shares of Common Stock
were granted under the 1995 Plan.
The 1995 Employee Stock Purchase Plan (the "Purchase Plan") provides
for the issuance of a maximum of 250,000 shares of Common Stock pursuant to
the exercise of non-transferable options granted to participating employees.
To participate in the Purchase Plan, an eligible employee must authorize
the Corporation to make payroll deductions in an amount not less than 1% of
the employee's base pay or salary but not more than 15% of the employee's
total compensation during the six month periods beginning January 1 and
July 1 (the "Payment Periods"). On the first business day of each Payment
Period, the Corporation grants to each eligible employee participating in
the Purchase Plan, an option to purchase on the last day of such Payment
Period a maximum of 500 shares of Common Stock provided that such employee
remains eligible to participate in the Plan throughout such Payment Period.
The exercise price of options is the lesser of (i) 85% of the average market
price of the Common Stock on the first business day of such Payment Period
or (ii) 85% of the average market price of the Common Stock on the last
business day of such Payment Period. The employee is entitled to exercise
such option only to the extent of the employee's accumulated payroll
<PAGE>
deductions on the last day of such Payment Period. The Purchase Plan is
administered by the Compensation Committee. As of December 31, 1996, options
to purchase 15,516 shares of Common Stock were exercised under the Purchase
Plan.
Compensation Committee Interlocks and Insider Participation
The Corporation's Board of Directors has established a Compensation
Committee consisting of Messrs. Gruner, Saldutti and Simmons. During the
fiscal year ended December 31, 1996, the Board of Directors performed
certain functions of the Compensation Committee. During this period, Mr.
Kutnick, the Corporation's President, Chief Executive Officer and a Director,
and Mr. Butlein, the Corporation's Senior Executive Vice President and
Chairman of the Board, participated in deliberations of the Corporation's
Board of Directors concerning the compensation of executive officers. As
noted below, however, all executive compensation for 1996 was reviewed,
approved and confirmed by the Compensation Committee. No executive officer
of the Corporation served as a member of the compensation committee of
another entity (or other committee of the Board of Directors performing
equivalent functions or, in the absence of any such committee, the entire
Board of Directors), one of whose executive officers served as a director
of the Corporation.
Compensation of Directors
Directors do not receive any cash compensation for their services,
although directors are reimbursed for their reasonable out-of-pocket
expenses incurred in attending meetings. Non-employee directors are also
eligible to participate in the Director Plan, as described above.
Compensation Committee Report on Executive Compensation
This report is submitted by the Corporation's Compensation Committee
(the "Committee"), which currently consists of Messrs. Gruner, Saldutti and
Simmons, each of whom is an independent, non-employee director of the
Corporation. The Committee, pursuant to authority delegated by the Board of
Directors, is responsible for the development and administration of the
Corporation's executive compensation policies and the administration of the
1989 Plan, the 1993 Plan, the 1995 Plan, the Director Plan and the Purchase
Plan. The Committee also oversees the compensation structure of the
Corporation's senior management and other employees.
The Corporation's executive compensation program for fiscal year 1996
was initially established by the Corporation's Board of Directors and
subsequently reviewed, confirmed and approved by the Compensation Committee.
The executive compensation program is designed to provide a compensation
package that will attract, motivate, retain and reward highly qualified
executive officers while providing incentives for executives to maximize
the Corporation's financial results for the benefit of the Corporation's
stockholders.
The executive compensation program is designed to achieve the above
goals through a combination of base salary, cash bonuses and long-term
incentive compensation in the form of stock options.
Base salary compensation levels for each of the Corporation's executive
officers are determined by evaluating the individual officer's
responsibilities, experience and performance, as well as generally available
information regarding salaries paid to executive officers with comparable
qualifications at companies in businesses comparable to the Corporation.
<PAGE>
Cash bonuses are determined annually and are based on the Corporation's
achievement of targeted measures of financial performance, including
revenue, profit and cost-saving goals, and, in certain cases, the
achievement of non-financial objectives in the officer's area of
responsibility.
Long-Term incentive compensation in the form of stock option grants is
designed to align the interests of executive officers more closely with
those of the Corporation's stockholders by allowing those officers to share
in long-term appreciation in the value of the Corporation's Common Stock.
It is the Corporation's policy to grant stock options to executive officers
at the time they join the Corporation in an amount consistent with the
employee's position and level of seniority. In addition, the Committee
generally makes annual performance-based option grants. In making such
performance-based grants, the Committee considers both individual and
general corporate performance, recommendations of the Chief Executive
Officer, existing levels of officer stock ownership and previous option
grants and the current stock price. For additional information regarding
the grant of options in 1996, see the table under the heading "Options
Grants in Fiscal Year 1996."
Compensation for the Corporation's President and Chief Executive
Officer, Dale Kutnick, is determined in accordance with the policies
applicable to other executive officers of the Corporation described above.
In 1996, Mr. Kutnick received base salary and cash bonus totaling $443,742.
Mr. Kutnick's base salary of $239,295 represented an increase of $13,545,
or 6%, over 1995. In addition to achievement of performance targets in
accordance with the Corporation's executive compensation policies, the
Committee determined that Mr. Kutnick's 1996 compensation was justified
by the Corporation's strong financial performance in 1996, a year in which
the Corporation reported continued profitability in each quarter. For
additional information regarding Mr. Kutnick's 1996 compensation, see the
table under the heading "Summary Compensation Table."
Section 162(m) of the Internal Revenue Code of 1986, as amended,
generally prevents publicly held corporations from deducting, for federal
income tax purposes, compensation (including compensation recognized by
the executive as a result of exercising a non-qualified stock option) in
excess of $1 million paid to certain executives, with certain exceptions.
The Committee has considered these requirements and it is the Committee's
present intention that, so long as it is consistent with its overall
compensation objectives, substantially all executive compensation will be
deductible for federal income tax purposes.
The Compensation Committee:
Harry S. Gruner
Francis J. Saldutti
Michael Simmons
<PAGE>
Stock Performance Graph
The following graph compares the yearly change in the cumulative total
stockholder return on the Corporation's Common Stock during the period from
the Corporation's initial public offering on December 1, 1995 through
December 31, 1996, with the cumulative total return on the Media General
Market Weighted Nasdaq Index Return ("Nasdaq Index") and the Media General
Industry Group 094 - Other Business Services Index ("Industry Index"). The
comparison assumes $100 was invested on December 1, 1995 in the
Corporation's Common Stock and in each of the foregoing indices and assumes
reinvestment of dividends, if any.
</TABLE>
<TABLE>
<CAPTION>
Comparison of Five Year(1)(2) Cumulative Total Return Among
META Group, Inc., Nasdaq Index and Industry Index
December 1, December 31, December 31,
1995 1995 1994
% % %
___________________________________________
<S> <C> <C> <C>
META Group, Inc. Common Stock 100.00 120.10 105.88
Industry Index 100.00 102.33 123.09
Nasdaq Index 100.00 99.63 123.81
</TABLE>
______________
(1) Prior to December 1, 1995 the Corporation's Common Stock was not
publicly traded. Comparative data is provided only for the period since
that date.
(2) The stock price performance shown on the graph is not necessarily
indicative of future price performance. Information used on the graph was
obtained from Media General Financial Services, a source believed to be
reliable, but the Corporation is not responsible for any errors or
omissions in such information.
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1996, the Corporation received $425,000 from First Albany
Corporation in consideration of the exclusive right to distribute the
Corporation's written research and analysis to certain financial services
customers of First Albany Corporation. See Note 12 of Notes to Financial
Statements in the Annual Report for a more detailed description of this
strategic alliance. As noted elsewhere in this Proxy Statement, Mr. McNamee,
a director of the Corporation, is also the Chairman and Co-Chief Executive
Officer of First Albany Corporation.
AUDITORS FOR FISCAL 1997
The Board of Directors has selected the firm of Deloitte & Touche LLP,
independent certified public accountants, to serve as auditors for the
fiscal year ending December 31, 1997. Deloitte & Touche LLP has served as
the Corporation's auditors since fiscal 1992. It is expected that a member
of Deloitte & Touche LLP will be present at the Annual Meeting with the
opportunity to make a statement if so desired and will be available to
respond to appropriate questions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act, requires the Corporation's
directors, executive officers and holders of more than 10% of the
Corporation's Common Stock (collectively, "Reporting Persons") to file
with the Commission initial reports of ownership and reports of changes in
ownership of Common Stock of the Corporation. Such persons are required by
regulations of the Commission to furnish the Corporation with copies of
all such filings. Based on its review of the copies of such filings received
by it with respect to the fiscal year ended December 31, 1996 and written
representations from certain Reporting Persons, the Corporation believes
that all Reporting Persons, other than Joaquin Gonzalez, who was late in
filing a Form 4 reporting the exercise of a stock option, complied with all
Section 16(a) filing requirements in the fiscal year ended December 31, 1996.
STOCKHOLDER PROPOSALS
Proposals of Stockholders intended for inclusion in the proxy statement
to be furnished to all stockholders entitled to vote at the next Annual
Meeting of Stockholders of the Corporation must be received at the
Corporation's principal executive offices not later than December 11, 1997.
In order to curtail controversy as to the date on which a proposal was
received by the Corporation, it is suggested that proponents submit their
proposals by Certified Mail, Return Receipt Requested to META Group, Inc.,
208 Harbor Drive, Stamford, Connecticut 06912-0061, Attention: Secretary.
EXPENSES AND SOLICITATION
The cost of solicitation of proxies will be borne by the Corporation,
and in addition to soliciting stockholders by mail through its regular
employees, the Corporation may request banks, brokers and other custodians,
nominees and fiduciaries to solicit their customers who have stock of the
Corporation registered in the names of a nominee and, if so, will reimburse
such banks, brokers and other custodians, nominees and fiduciaries for
their reasonable out-of-pocket costs. Solicitation by officers and employees
of the Corporation may also be made of some stockholders in person or by
mail, telephone or telegraph following the original solicitation.
The contents and the sending of this proxy statement have been
approved by the Board of Directors of the Corporation.
--------------------------------------------------
<PAGE>
PROXY CARD
META GROUP, INC.
Proxy for Annual Meeting of Stockholders
May 19, 1997
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
OF META GROUP, INC.
The undersigned, revoking all prior proxies, hereby appoints Dale Kutnick
and Bernard F. Denoyer, and each of them alone, proxies, with full power of
substituion, to vote all shares of Common Stock of META Group, Inc. (the
"Corporation") that the undersigned is entitled to vote at the Annual Meeting
of Stockholders of the Corporation, to be held on Monday, May 19, 1997 at
9:00 a.m., Connecticut time, at The Hyatt Regency Hotel, 1800 East Putnam
Avenue, Old Greenwich, Connecticut 06870, and at any adjournments thereof,
upon the matters set forth in the Notice of Annual Meeting of Stockholders
and related Proxy Statement dated April 10, 1997, a copy of wich has been
received by the undersigned, and in their discretion upon any other business
that may properly come before the meeting or any adjounments thereof.
Attendance of the undersigned at the meeting or at any adjourned session
thereof will not be deemed to revoke this proxy unless the undersigned
affirmatively indicates at the meeting the intention of the undersigned to
vote said shares in person.
-------------------------
Please mark
your votes as (X)
indicated in
this example
1. To elect two Class (II) Directors to serve for a three-year term
or until their successors are elected and qualified.
FOR all nominees WITHHOLD Nominees: Marc Butlein, Harry S. Gruner
listed to the right AUTHORITY
(except as marked to vote for INSTRUCTIONS: To withhold authority to
to the contrary) all nominees vote for any individual
listed to the right nominee's name in the space
( ) ( ) __________________________________________
2. To transact such other business as may properly come before the meeting.
THE SHARES REPRESENTED BY THIS PROXY
WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR THE
ELECTION OF DIRECTORS, AND DISCRETIONARY
AUTHORITY WILL BE DEEMED GRANTED UNDER
ITEM 2.
Dated: __________________________, 1997
_______________________________________
Signature(s) of Stockholder(s)
_______________________________________
Please Print Name
(If signing as attorney, executor, trustee
or guardian, please give you full title as
such. If stock is held jointly, each owner
should sign.)
