<PAGE> 1
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
/X/ Definitive Proxy Statement Commission Only (as permitted
|_| Definitive Additional Materials by Rule 14a-6(e)(2) )
|_| Soliciting Material Pursuant to Rule 14a-11a or Rule 14a-12
INTEGRATED SYSTEMS CONSULTING 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):
|_| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
|_| Fee paid previously with preliminary materials:
- --------------------------------------------------------------------------------
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
April 11, 1997
Dear Shareholders:
It is a pleasure to invite you to the annual meeting of Integrated
Systems Consulting Group, Inc., which will be held at The Philadelphia Marriott
West, 111 Crawford Avenue, West Conshohocken, Pennsylvania, on Friday, May 23,
1997 at 9:00 a.m. Information about the matters to be voted upon at the meeting
is in the attached Notice of Annual Meeting of Shareholders and Proxy Statement.
To assure that a quorum is present at the meeting, you are urged to
sign and mail the enclosed proxy card at once, even though you may plan to
attend in person. You may revoke the proxy granted in the proxy card at any time
prior to its being voted by filing with the Secretary of the Corporation either
an instrument of revocation or a duly executed proxy card bearing a later date.
If you attend the meeting, you may elect to revoke the proxy and vote your
shares in person.
The Corporation's Annual Report to Shareholders for the fiscal year
ended December 31, 1996 is being distributed to shareholders with the attached
Proxy Statement.
Sincerely,
David S. Lipson
Chairman, President and
Chief Executive Officer
<PAGE> 3
INTEGRATED SYSTEMS CONSULTING GROUP, INC.
575 E. SWEDESFORD ROAD
WAYNE, PENNSYLVANIA 19087
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The annual meeting of shareholders of Integrated Systems Consulting Group,
Inc. (the "Corporation") will be held at The Philadelphia Marriott West, 111
Crawford Avenue, West Conshohocken, Pennsylvania, on Friday, May 23, 1997 at
9:00 a.m., for the following purposes:
1. To elect eleven directors.
2. To consider and act upon a proposal to approve amendments to the
Corporation's Amended and Restated 1989 Incentive Stock Option
Plan.
3. To ratify the appointment of KPMG Peat Marwick LLP as the
independent public accountants to audit the Corporation's accounts
for the current year.
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on February 24, 1997
as the record date for determining shareholders entitled to notice of and to
vote at the meeting.
Whether or not you plan to attend the meeting, please sign, date and return
the enclosed proxy in the postage-paid envelope provided for your convenience.
Returning a proxy will ensure a quorum and will not deprive you of your right to
attend the annual meeting and vote your shares in person.
By Order of the Board of Directors,
David D. Gathman
Executive Vice President, Finance
and Administration, Chief Financial
Officer and Secretary
Wayne, Pennsylvania
April 11, 1997
<PAGE> 4
INTEGRATED SYSTEMS CONSULTING GROUP, INC.
575 E. SWEDESFORD ROAD
WAYNE, PA 19087
-------------------------------
PROXY STATEMENT
-------------------------------
ANNUAL MEETING OF SHAREHOLDERS
MAY 23, 1997
This Proxy Statement is furnished to the shareholders of Integrated Systems
Consulting Group, Inc., a Pennsylvania corporation (the "Corporation"), in
connection with the solicitation of proxies by the Board of Directors for use at
the annual meeting of shareholders of the Corporation to be held on Friday, May
23, 1997 and any adjournment or adjournments thereof (the "Meeting"). A copy of
the Notice of Annual Meeting accompanies this Proxy Statement. It is anticipated
that the mailing of this Proxy Statement will commence on or about April 11,
1997.
Only holders of record of the Corporation's common stock (the "Common
Stock") at the close of business on February 24, 1997, the Record Date for the
Meeting (the "Record Date"), will be entitled to notice of and to vote at the
Meeting. On the Record Date, the Corporation had 7,907,720 shares of Common
Stock issued and outstanding, which are the only securities of the Corporation
entitled to vote at the Meeting. Each share is entitled to one vote.
The presence at the Meeting, in person or by proxy, of the holders of a
majority of the issued and outstanding shares of Common Stock entitled to vote
at the Meeting will be necessary to constitute a quorum. If a broker that is a
record holder of Common Stock does not return a signed proxy, the shares of
Common Stock that would otherwise be represented by such proxy will not be
considered present at the Meeting and will not be counted toward establishing a
quorum. If a broker that is a record holder of Common Stock does return a signed
proxy, but is not authorized to vote on one or more matters (each such matter, a
"broker non-vote"), the shares of Common Stock represented by such proxy will be
considered present at the Meeting for purposes of determining the presence of a
quorum, but only with respect to those matters as to which the broker is
authorized to vote. The shares represented by such a proxy will be considered
not present for quorum purposes with respect to matters as to which the broker
is not authorized to vote. Abstentions will be counted for purposes of
determining the presence of a quorum for transaction of business at the Meeting.
Assuming a quorum is present, (i) directors of the Corporation will be
elected by the affirmative vote of the holders of a majority of the issued and
outstanding shares of Common Stock present, in person or by proxy, at the
Meeting and (ii) the affirmative vote of the holders of a majority of the issued
and outstanding shares of Common Stock present, in person or by proxy, at the
Meeting will be required to approve the amendments to the Corporation's Amended
and Restated 1989 Incentive Stock Option Plan (the "ISOP") and to ratify the
appointment of KPMG Peat Marwick LLP as auditors for the current year.
Abstentions and broker non-votes will have no effect on the outcome of the
election of directors. With respect to the amendment of the ISOP and
ratification of the appointment of auditors, abstentions and broker non-votes
will have the same effect as "no" votes.
Shareholders who execute proxies may revoke them by giving written notice
to the Secretary of the Corporation at any time before the proxies are voted.
Attendance at the Meeting will not have the effect
<PAGE> 5
of revoking a proxy unless the shareholder attending the Meeting notifies the
Secretary of the Meeting in writing of the revocation of the proxy at any time
prior to the voting of the proxy.
The Board of Directors does not know of any matter other than the election
of directors, the amendment of the ISOP and the ratification of the appointment
of auditors for the current year that is expected to be presented for
consideration at the Meeting. However, if other matters properly come before the
Meeting, the persons named in the accompanying proxy intend to vote thereon in
accordance with their judgment. All proxies received pursuant to this
solicitation will be voted, except as to matters where authority to vote is
specifically withheld. Where a choice is specified on a proxy as to a proposal,
the shares represented by the proxy will be voted in accordance with such
specification. If no instructions are given, the persons named in the proxy
solicited by the Board of Directors intend to vote (i) FOR the nominees for
election as directors named under the caption "Election of Directors," (ii) FOR
the amendments to the ISOP, and (iii) FOR the ratification of the appointment of
KPMG Peat Marwick LLP as the Corporation's auditors for the current year.
The Corporation will bear the cost of the Meeting and the cost of
soliciting proxies, including the cost of mailing the proxy material. In
addition to solicitation by mail, directors, officers and regular employees of
the Corporation (who will not be specifically compensated for such services) may
solicit proxies by telephone. The Corporation may engage Corporate Investor
Communications, Inc. ("CIC") to assist in the solicitation of proxies from
shareholders. In the event the Corporation does engage CIC, the Corporation will
enter into an agreement with CIC pursuant to which the Corporation will pay CIC
a fee of approximately $5,000 plus reimbursement of reasonable out-of-pocket
expenses.
2
<PAGE> 6
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Record Date, the number and
percentage of shares of Common Stock, which according to information supplied to
the Corporation, are beneficially owned by: (i) each person who is the
beneficial owner of more than 5% of the outstanding shares of Common Stock; (ii)
each director and nominee for director; (iii) each named executive officer (as
defined under "Executive Compensation"); and (iv) all directors and executive
officers as a group. Unless otherwise indicated, all persons listed below have
sole voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them.
<TABLE>
<CAPTION>
PERCENT OF
NAME AND ADDRESS NO. OF SHARES CLASS (1)
- ---------------- ------------- ----------
<S> <C> <C>
David S. Lipson (2).................................. 2,993,932 37.9%
575 East Swedesford Road
Wayne, Pa 19087
Technology Leaders II (3)............................ 1,209,955 15.0
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087
Safeguard Scientifics, Inc. (4)...................... 756,025 9.4
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087
Warrant and Stock Trust (5).......................... 370,137 4.5
1133 Rose Glen
Gladwyne, PA 19035
David F. Elderkin (6)................................ 115,100 1.5
David D. Gathman (7)................................. 89,876 1.1
Edward P. Kaiserian (8).............................. 20,600 *
Jay M. Rose (9)...................................... 31,250 *
Frank Baldino, Jr., Ph.D............................. 5,000 *
Melvyn E. Bergstein.................................. 10,434 *
Donald R. Caldwell (10).............................. 20,040 *
Mark J. DeNino (11).................................. 1,080 *
David S. Fehr........................................ -- *
James L. Mann........................................ 8,000 *
Donna J. Pedrick (12)................................ 1,650 *
Michael D. Stern (13)................................ 379,906 4.6
Edward S.J. Tomezsko, Ph.D. (14)..................... 15,050 *
All executive officers and directors................. 3,714,818 44.4
as a group (14 persons) (15)
</TABLE>
- ---------------------
* Represents less than 1% of the outstanding Common Stock.
3
<PAGE> 7
(1) Solely for the purpose of the percentage ownership calculation for each
beneficial owner depicted herein, the number of shares of Common Stock
deemed outstanding (i) assumes there are 7,907,720 shares of Common
Stock outstanding as of the Record Date, and (ii) includes additional
shares issuable pursuant to options or warrants held by such owner that
may be exercised within 60 days after the Record Date, as set forth
below. Soley for the purpose of the percentage beneficial ownership
calculation for all executive officers and directors as a group, the
aggregate number of shares underlying all presently exercisable options
held by such persons is added to the total number of shares of Common
Stock outstanding.
(2) Excludes 30,276 shares of Common Stock outstanding and 339,861 shares
of Common Stock issuable pursuant to a warrant, which outstanding
shares and warrant were transferred by Mr. Lipson to the Warrant and
Stock Trust. See footnotes (5) and (13). Mr. Lipson disclaims
beneficial ownership of such securities.
(3) Includes 169,931 shares of Common Stock issuable pursuant to warrants.
Technology Leaders II L.P. and Technology Leaders II Offshore C.V. are
venture capital funds that are required by their governing documents to
make all investment, voting and disposition actions in tandem.
Technology Leaders II L.P. and Technology Leaders II Offshore C.V. are
referred to herein as "Technology Leaders II." Of the 1,040,024 shares
outstanding and 169,931 shares (the "Derivative Shares") obtainable
upon the exercise of the warrants owned by Technology Leaders II,
579,605 shares and 94,703 Derivative Shares are owned by Technology
Leaders II L.P. and 460,419 shares and 75,228 Derivative Shares are
owned by Technology Leaders II Offshore C.V. Technology Leaders II
Management L.P. ("TLM"), the sole general partner of Technology Leaders
II L.P. and the co-general partner of Technology Leaders II Offshore
C.V., exercises through its executive committee sole investment and
voting power with respect to the shares owned by these entities.
(4) Includes 169,931 shares of Common Stock issuable pursuant to a warrant.
Shares are held of record by Safeguard Scientifics (Delaware), Inc., a
wholly owned subsidiary of Safeguard Scientifics, Inc. ("Safeguard").
Does not include shares beneficially owned by Technology Leaders II, in
which Safeguard has a beneficial interest.
(5) Consists of 30,276 shares of Common Stock outstanding and 339,861
shares of Common Stock issuable pursuant to a warrant. See footnotes
(2) and (13).
(6) Includes 15,000 shares of Common Stock issuable pursuant to exercisable
options.
(7) Includes 62,976 shares of Common Stock issuable pursuant to exercisable
options.
(8) Includes 4,800 shares of Common Stock issuable pursuant to exercisable
options.
(9) Includes 23,250 shares of Common Stock issuable pursuant to exercisable
options.
(10) Excludes 756,025 shares beneficially owned by Safeguard. Mr. Caldwell
serves as President and Chief Operating Officer of Safeguard. See
"Election of Directors." Mr. Caldwell disclaims beneficial ownership of
such shares.
(11) Excludes 1,209,955 shares beneficially owned by Technology Leaders II.
Mr. DeNino is a General Partner and Managing Director of TLM and is a
member of TLM's eleven-person executive committee. See "Election of
Directors." Mr. DeNino disclaims beneficial ownership of such shares.
(12) Includes 150 shares of Common Stock issuable pursuant to exercisable
options.
(13) Includes 30,276 shares of Common Stock outstanding and 339,861 shares
of Common Stock issuable pursuant to a warrant held by the Warrant and
Stock Trust, of which Mr. Stern is the sole trustee. Also includes 150
shares of Common Stock issuable pursuant to exercisable options.
(14) Includes 7,050 shares of Common Stock issuable pursuant to exercisable
options.
(15) Includes (i) an aggregate of 126,576 shares of Common Stock issuable
pursuant to exercisable options and (ii) 30,276 shares of Common Stock
outstanding and 339,861 shares of Common Stock issuable pursuant to a
warrant held by the Warrant and Stock Trust.
4
<PAGE> 8
1. ELECTION OF DIRECTORS
At the Meeting, eleven directors are to be elected, each to hold office
until the next annual meeting of shareholders and until his or her successor has
been elected and qualified. The nominees for election to the Board of Directors
are named in the table below. All the nominees are presently serving as
directors of the Corporation. If any nominee listed in the table below should
become unavailable for any reason, which management does not anticipate, proxies
will be voted for any substitute nominee selected by management prior to or at
the Meeting, or a motion to reduce the membership of the Board of Directors to
the number of nominees available. The information concerning the nominees has
been furnished by them to the Corporation.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS SHAREHOLDERS VOTE "FOR"
THE ELECTION OF THE SLATE OF NOMINEES SET FORTH BELOW. ALL SHARES REPRESENTED BY
DULY RETURNED PROXY CARDS WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY OTHERWISE
ON THEIR PROXY CARDS.
<TABLE>
<CAPTION>
DIRECTOR POSITION(S) WITH THE
NAME AGE SINCE CORPORATION
- ---- --- ----- -----------
<S> <C> <C> <C>
David S. Lipson......................... 53 1988 Chairman of the Board of
Directors, Chief Executive
Officer, President and
Treasurer
David D. Gathman........................ 49 1990 Executive Vice President,
Finance and Administration,
Chief Financial Officer,
Secretary, Assistant
Treasurer and Director
Frank Baldino, Jr., Ph.D................ 43 1995 Director
Melvyn E. Bergstein..................... 55 1995 Director
Donald R. Caldwell...................... 50 1995 Director
Mark J. DeNino.......................... 43 1995 Director
David S. Fehr........................... 61 1996 Director
James L. Mann........................... 62 1995 Director
Donna J. Pedrick........................ 47 1994 Director
Michael D. Stern........................ 48 1995 Director
Edward S.J. Tomezsko, Ph.D.............. 62 1988 Director
</TABLE>
ADDITIONAL BIOGRAPHICAL INFORMATION REGARDING THE NOMINEES
DAVID S. LIPSON co-founded the Corporation and has been Chairman of the
Board of Directors, Chief Executive Officer, President and Treasurer since its
inception. Mr. Lipson has more than 29 years of industry experience in executive
management and sales and marketing. His previous employers include
5
<PAGE> 9
IBM, Control Data Corporation, Dun & Bradstreet Computer Services, SunGard Data
Systems Inc. ("SunGard") and Digital Equipment Corporation.
DAVID D. GATHMAN has served as Executive Vice President, Finance and
Administration and Chief Financial Officer since January 1997 and as Assistant
Treasurer and Secretary since April 1994. He served as Chief Operating Officer
and Vice President from April 1994 to January 1997. From February 1987 to April
1994, Mr. Gathman was Vice President-Finance and Chief Financial Officer of
SunGard, and from December 1982 to February 1987, Mr. Gathman was Controller of
SunGard.
FRANK BALDINO, JR., Ph.D. founded and has served since 1987 as
President, Chief Executive Officer and a director of Cephalon, Inc., an
integrated specialty biopharmaceutical company that discovers, develops, and
markets products to treat neurological disorders. Dr. Baldino also currently
serves as an adjunct associate professor at Allegheny University and Temple
University School of Medicine and as a director of Pharmacopeia, Inc. and
ViroPharma, Inc. Dr. Baldino's previous positions include Senior Research
Biologist in Neuroscience at E.I. DuPont de Nemours & Company, as well as
several research and instructional positions at UMDNJ-Rutgers Medical School,
A.I. DuPont Institute, and Temple University School of Medicine.
MELVYN E. BERGSTEIN founded and has been Chief Executive Officer and
Chairman of the Board of Directors of Diamond Technology Partners Consulting,
Inc., a business and information technology consulting firm, since February
1994. Prior to that time, Mr. Bergstein served as President and Vice Chairman
from September 1991 to September 1993 and as Senior Vice President from July
1989 to September 1991 of Technology Solutions Corporation, a provider of
consulting services to the information technology and software development
industry. Mr. Bergstein's prior positions included serving as a partner and
Managing Director, Technology at Andersen Consulting and on the Board of
Directors of Arthur Andersen & Co. and Chairman of its consulting oversight
committee.
DONALD R. CALDWELL has been President and Chief Operating Officer of
Safeguard since February 1996. Mr. Caldwell was an Executive Vice President of
Safeguard from December 1993 to February 1996. Prior to that time, Mr. Caldwell
was President of Valley Forge Capital Group, Ltd., a business mergers and
acquisition advisory firm that he founded, from April 1991 to December 1993 and
an executive officer of a predecessor company of Cambridge Technology Partners
(Massachusetts), Inc., a provider of information technology consulting and
software development, from December 1989 to March 1991. Mr. Caldwell's prior
positions included serving as a partner in the national office of Arthur Young &
Co. (a predecessor to Ernst & Young, LLP).
MARK J. DeNINO has been a General Partner and Managing Director of
Technology Leaders II Management L.P. since November 1994. Prior to such time,
Mr. DeNino was President of Crossroads Capital, Inc., an investment banking
firm, from September 1991 to October 1994. Mr. DeNino is a director of Aloette
Cosmetics, Inc., CRW Financial, Inc. and Daleco Resources, Inc., as well as four
privately-held companies.
DAVID S. FEHR was Corporate Senior Vice President of Dun & Bradstreet
Corporation where he served as a Group Head from 1985 until retirement in March
1995. Prior to that, he was President of D&B Computing Services (previously
National CSS) from 1981 to 1986.
JAMES L. MANN has been Chairman of the Board of Directors, Chief
Executive Officer and President of SunGard since 1987. Mr. Mann has previously
served on the Boards of Directors of Goal
6
<PAGE> 10
Systems International, Inc., Digital Communications Associates, Inc., and
Reality Technologies, Inc., a financial software company which was acquired by
Reuters in 1994. Mr. Mann is a past Chairman of the Information Technology
Association of America. Mr. Mann is a director of SunGard and T-Netix, Inc.
DONNA J. PEDRICK has been Vice President, Human Resources of SunGard
since January 1988. Ms. Pedrick is the past President of the Information
Services Human Resource Association, a past member of the Penjerdel Employee
Benefits Association membership committee and a member of the Penn State
University Delaware County Campus Board of Advisors.
MICHAEL D. STERN has been President of Innovative Software Solutions,
Inc. since January 1997. From January 1993 to January 1997, Mr. Stern maintained
a private law practice. From 1989 to January 1993, Mr. Stern served as President
of National Software Testing Laboratories, Inc., a company which he co-founded.
Prior to that time, Mr. Stern co-founded PermaColor, a manufacturer of
photographic preservation systems, and served as House Counsel for Presidential
Airways Corporation.
EDWARD S.J. TOMEZSKO, Ph.D. is a tenured associate professor of
chemistry and has been the Campus Executive Officer of Penn State University's
Delaware County Campus since 1988.
ADDITIONAL INFORMATION REGARDING THE BOARD OF DIRECTORS
The Board of Directors held four meetings during 1996. Each of the
directors attended at least 75% of the meetings of the Board of Directors and
committees of which he or she was a member.
The Board of Directors has a Compensation Committee to review and
approve the compensation arrangements for senior management of the Corporation,
including salaries, bonuses and other forms of remuneration and to administer
the ISOP. The current members of the Compensation Committee are Ms. Pedrick
(Chairperson) and Mr. Bergstein. The Compensation Committee held two meetings
during 1996.
The Board of Directors has an Audit Committee to recommend the
appointment of the Corporation's auditors, to discuss the scope and results of
the audit with the auditors, to review with management and the auditors the
Corporation's interim and year-end operating results, to consider the adequacy
of the internal accounting controls and audit procedures of the Corporation and
to review the non-audit services to be performed by the auditors. The current
members of the Audit Committee are Dr. Tomezsko (Chairman), Dr. Baldino and Mr.
Stern. The Audit Committee held two meetings during 1996.
The Board of Directors has an Executive Committee, which exercises the
full authority of the Board of Directors in the management of the business and
affairs of the Corporation at any time when the Board of Directors is not in
session, except with respect to those matters which, under the Pennsylvania
Business Corporation Law, cannot be delegated by the Board of Directors. The
current members of the Executive Committee are Mr. Lipson (Chairman), Mr.
Caldwell and Mr. Mann. The Executive Committee held no meetings during 1996.
The Board of Directors has a Nominating Committee the principal
function of which is to make recommendations to the Board of Directors regarding
the size and composition of the Board of Directors, the forms of proxy statement
and proxy card, shareholder voting policies and practices, plans for the annual
meetings of shareholders, nominees for election to the Board of Directors, and
certain other matters
7
<PAGE> 11
relating to the election of directors. The current members of the Nominating
Committee are Mr. Gathman (Chairman), Mr. DeNino and Mr. Lipson. The Nominating
Committee held no meetings during 1996. The Nominating Committee considers
recommendations from shareholders and other qualified sources with regard to
nominees for election to the Board of Directors. Shareholders may submit
recommendations by letter addressed to the Secretary of the Corporation.
DIRECTOR COMPENSATION
All non-employee directors of the Corporation receive an annual base
payment of $1,000 plus an additional $500 for each regular or special meeting of
the Board of Directors they attend. Directors are not additionally compensated
for service on committees. Directors who are also employees of the Corporation
are not compensated for their services as directors. Each non-employee director
automatically is granted an option covering 10,000 shares of Common Stock upon
his or her initial election to the Board of Directors and automatically is
granted an option covering an additional 2,000 shares of Common Stock every
second year thereafter following his or her re-election to the Board of
Directors.
EXECUTIVE OFFICERS OF THE CORPORATION
The names and ages of the executive officers of the Corporation as of
March 31, 1997 and their positions with the Corporation are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION(S)
- ---- --- -----------
<S> <C> <C>
David S. Lipson......................... 53 Chairman of the Board of
Directors, Chief Executive
Officer, President and Treasurer
David D. Gathman........................ 49 Executive Vice President,
Finance and Administration,
Chief Financial Officer,
Secretary, Assistant Treasurer
and Director
David F. Elderkin....................... 43 Vice President, Technology and
Assistant Secretary
Edward P. Kaiserian..................... 44 Vice President, Client Services
Jay M. Rose............................. 45 Vice President and General
Manager, Systems and Networks
Victor E. Stambaugh..................... 42 Vice President, Marketing
</TABLE>
Set forth below is additional biographical information for each executive
officer, based on information supplied by him to the Corporation:
DAVID S. LIPSON. See "Election of Directors."
8
<PAGE> 12
DAVID D. GATHMAN. See "Election of Directors."
DAVID F. ELDERKIN joined the Corporation in June 1989 and has served as
Vice President, Technology since June 1990. Mr. Elderkin has more than 20 years
of experience in technology assessment, management of applications development,
and systems and network management. He has managed projects for aerospace,
banking, healthcare, manufacturing, and pharmaceutical companies. Mr. Elderkin
is responsible for maintaining the Corporation's focus on leading edge
technologies.
EDWARD P. KAISERIAN joined the Corporation in March 1991 and served as
an account executive from March 1991 to January 1993, a Regional Manager from
January 1993 until January 1995, as Vice President from January 1995 to March
1997 and has served as Vice President, Client Services since March 1997. From
February 1984 until March 1991, Mr. Kaiserian served in various capacities at
Source Services Corporation, a personnel services firm specializing in the
recruitment of software and engineering professionals for the computer industry
and technology companies.
JAY M. ROSE joined the Corporation in November 1995 and served as Vice
President, Sales from November 1995 to March 1997 and has served as Vice
President and General Manager, Systems and Networks since March 1997. Prior to
joining the Corporation, Mr. Rose held various positions with Shared Medical
Systems Corp., a provider of information services, including Vice President of
Product Development from 1992 to 1995, Vice President of Marketing from 1991 to
1992 and Vice President and General Manager of a wholly-owned subsidiary from
1987 to 1991.
VICTOR E. STAMBAUGH joined the Corporation in March 1989 and served as
Senior Consultant from March 1989 to January 1994, Principal Consultant from
January 1994 to March 1997, Director, Technology Marketing from September 1995
to March 1997 and has served as Vice President, Marketing since March 1997. Mr.
Stambaugh has more than 15 years of experience in the information consulting
industry and has managed projects in the pharmaceutical, scientific, health
care, property management, and broadcasting industries. Mr. Stambaugh is
responsible for the development of service offerings, marketing activities and
sales support for the Corporation's document management, pharmaceutical
research, and technology practices.
9
<PAGE> 13
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning
compensation paid or accrued for each of the last three years with respect to
the Corporation's chief executive officer and its four other most highly
compensated executive officers at December 31, 1996 (the "named executive
officers"):
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION (1) SECURITIES
----------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION
- --------------------------- ---- ------ ----- ------- ------------
<S> <C> <C> <C> <C> <C>
David S. Lipson.......... 1996 $200,000 $79,650 -- $147,927(2)
Chairman, Chief Executive 1995 200,000 75,000 -- 120,541(2)
Officer, President and 1994 100,000 150,000 -- 68,337(2)
Treasurer
David D. Gathman......... 1996 100,000 76,860 -- 1,974(3)
Executive Vice President, 1995 100,000 46,471 137,400 1,411(3)
Finance and Administration, 1994 75,000(5) 27,544 -- 930(3)
Chief Financial Officer,
Secretary and Assistant Treasurer
David F. Elderkin........ 1996 60,000 66,240 -- 2,130(4)
Vice President, Technology and 1995 60,000 47,704 18,750 1,597(4)
Assistant Secretary 1994 60,000 41,585 6,000 1,468(4)
Edward P. Kaiserian...... 1996 100,000 114,205 -- 1,500(3)
Vice President, Client Services 1995 75,000 108,734 9,000 1,500(3)
1994 75,000 78,689 1,500 1,282(3)
Jay M. Rose.............. 1996 100,000 183,904 -- 1,597(3)
Vice President and General 1995 4,964(6) 14,167 41,250 --
Manager, Systems and Networks 1994 -- -- -- --
</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 that do
not exceed the lesser of $50,000 or 10% of the aggregate of any such
named executive officer's salary and bonus in the year in which the
same were received.
(2) Includes $143,314, $115,783, and $63,079 respectively, for 1996, 1995
and 1994 for life insurance premiums paid on behalf of Mr. Lipson. In
the event of Mr. Lipson's death the Corporation will receive proceeds
to the extent of premiums paid. The amounts also include the
Corporation's contributions under the Corporation's 401(k) plan of
$1,833, $1,500 and $2,000 in 1996, 1995 and 1994, respectively and
$2,780, $3,258 and $3,258 in disability insurance premiums for 1996,
1995, and 1994, respectively.
(3) Represents a contribution under the Corporation's 401(k) plan.
(4) Includes the Corporation's contributions under the Corporation's 401(k)
plan of $1,440, $964 and $835 in 1996, 1995, and 1994, respectively and
$690, $633 and $633 in disability insurance premiums in 1996, 1995, and
1994 respectively.
(5) Mr. Gathman became employed by the Corporation on April 1, 1994.
(6) Mr. Rose became employed by the Corporation on November 25, 1995.
10
<PAGE> 14
STOCK OPTION GRANTS
None of the named executive officers received stock options in 1996.
AGGREGATED OPTION EXERCISES IN 1996 AND YEAR-END OPTION VALUES
The following table sets forth information concerning options exercised
during 1996 and the number and the hypothetical value of certain unexercised
options of the Corporation held by the named executive officers as of December
31, 1996. This table is presented solely for purposes of complying with the
Commission rules and does not necessarily reflect the amounts the persons named
below will actually receive upon sale of the shares acquired upon exercise of
the options.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1996 DECEMBER 31, 1996
----------------------
SHARES ACQUIRED
NAME ON EXERCISE VALUE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David D. Gathman 21,900 $111,294 47,568 73,932 $581,757 $878,948
David F. Elderkin 15,600 267,642 37,800 45,150 503,255 554,111
Edward P. Kaiserian 3,600 51,757 --- 16,200 --- 198,494
Jay M. Rose 3,000 31,260 23,250 15,000 242,265 156,300
</TABLE>
EMPLOYMENT AGREEMENTS
Each of the named executive officers has an employment agreement with
the Corporation. Mr. Lipson's employment agreement provides for his employment
through December 31, 2000 at a specified annual salary and an annual bonus based
upon the achievement of certain revenue and income goals, as set annually by the
Board of Directors. The employment agreement for each of Mr. Gathman, Mr.
Kaiserian, Mr. Elderkin and Mr. Rose provides for his employment for an
indefinite period at a specified salary, subject to the right of either party to
terminate upon thirty days' prior written notice. In addition, each such
employment agreement provides for an annual bonus based upon the achievement of
goals (such as revenues and income) as set annually by the Board of Directors
and also contains other terms customarily found in executive officer employment
agreements, including provisions relating to reimbursement of certain business
expenses, participation in employee benefit plans generally available to the
other executive officers of the Corporation, severance, confidentiality and
noncompetition.
11
<PAGE> 15
INCENTIVE STOCK OPTION PLAN
For a description of the ISOP, see "II. Amendments to the ISOP."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised of Ms. Pedrick and Mr.
Bergstein. No member of the Compensation Committee was at any time during 1996,
or formerly, an officer or employee of the Corporation.
COMPENSATION COMMITTEE REPORT
In July 1996, the Board of Directors delegated to the Compensation
Committee responsibility for (i) approving the salary and other forms of
remuneration of the chief executive officer, (ii) reviewing the compensation
arrangements for other senior management and (iii) administering the ISOP. This
responsibility of the Compensation Committee became effective for the current
year ending December 31, 1997. For prior years, including the year ending
December 31, 1996, the compensation of the named executive officers was approved
by the Board of Directors upon the recommendation of Mr. Lipson. Mr. Lipson's
recommendations generally were based on each executive's level of responsibility
and the prevailing compensation arrangements for positions of similar
responsibility in comparable organizations. The Board gave substantial weight to
Mr. Lipson's recommendations and found them reasonable in light of the
Corporation's performance.
The Compensation Committee is establishing executive compensation
policies for the current year and has engaged an independent consultant to
assist it in this effort. The Corporation is in a highly competitive industry.
In order to succeed, the Compensation Committee believes the Corporation must be
able to attract and retain outstanding executives, promote among them the
economic benefits of stock ownership in the Corporation, and motivate and reward
executives who, by their industry, loyalty and exceptional service, make
contributions of special importance to the success of the business of the
Corporation. The Compensation Committee intends to structure its executive
compensation program to support the strategic goals and objectives of the
Corporation and to ensure that an appropriate relationship exists between
executive remuneration and shareholder value.
Donna J. Pedrick
Melvyn E. Bergstein
12
<PAGE> 16
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on
the Corporation's Common Stock for the period beginning with the commencement of
the Corporation's initial public offering on April 17, 1996 through December 31,
1996 with the cumulative total return for the Nasdaq Market Index and an index
that includes organizations in the Corporation's Standard Industrial
Classification code number 7373 - Computer Integrated System Design (the "SIC
Index"). The comparison assumes $100 was invested on April 17, 1996 in the
Corporation's Common Stock at the $5 initial offering price and in each of the
Nasdaq Market Index and the SIC Index and assumes reinvestment of dividends, if
any.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
PERFORMANCE GRAPH DATA POINTS
- ------------------------------------------------------------------------------------------
4/17/96 12/31/96
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Integrated Systems Consulting Group, Inc. $100.00 $275.00
- ------------------------------------------------------------------------------------------
Nasdaq Market Index 100.00 107.16
- ------------------------------------------------------------------------------------------
SIC Index 100.00 87.94
- ------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 17
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
DLB Systems, Inc. ("DLB") purchased approximately $2.9 million in
services from the Corporation in 1996 and the Corporation expects DLB will
purchase in excess of $60,000 in services in 1997. At December 31, 1996, the
Corporation had outstanding accounts receivable from DLB of approximately
$572,000 in the aggregate and a note receivable (representing converted accounts
receivable) from DLB under which the outstanding principal amount was $50,000.
The note is unsecured, matures on September 30, 1997 and bears interest at the
rate of 7% per annum. As of March 21, 1997, Safeguard held approximately 81.0%
of the voting rights of DLB. Donald R. Caldwell, a director of the Corporation,
is also a director of DLB.
Premier Solutions, Ltd. ("Premier") purchased approximately $114,000 in
services from the Corporation in 1996. As of March 21, 1997, Safeguard held
approximately 85.0% of the outstanding voting stock of Premier.
2. AMENDMENTS TO THE ISOP
Presently, the Corporation may grant options to purchase up to a
maximum of 1,250,000 shares of Common Stock under the ISOP. The expiration date
of the ISOP is July 5, 1999. As of March 21, 1997, the Corporation had granted
options to purchase an aggregate of 1,138,646 shares of Common Stock (net of
expired and terminated options) under the ISOP. As of such date, 111,354 shares
remain available under the Plan.
Subject to shareholder approval as described in this Proxy Statement,
the Board of Directors has approved a proposal to amend the ISOP. These
amendments would increase by 400,000 the number of shares of Common Stock that
may be issued under the ISOP and would extend by ten years from the date of the
Meeting (until May 22, 2007) the termination date of the ISOP. If these
amendments are approved, the total number of shares of Common Stock remaining
available for issuance under the ISOP will be 511,354, plus any shares remaining
unpurchased under previously granted options that terminate or expire without
being exercised in full. Based on the closing sale price of the Common Stock on
March 21, 1997 ($8.875), as reported on the NASDAQ National Market System
("Nasdaq"), the aggregate market value of the shares of Common Stock reserved
for issuance under the ISOP (net of such shares already issued pursuant to the
exercise of stock options and including the additional 400,000 shares subject to
shareholder approval as set forth herein) was approximately $12.2 million.
THE BOARD OF DIRECTORS BELIEVES THE AMENDMENTS TO THE ISOP TO INCREASE
THE MAXIMUM NUMBER OF SHARES OF COMMON STOCK ISSUABLE THEREUNDER BY 400,000 AND
TO EXTEND ITS EXPIRATION DATE TO MAY 22, 2007 IS IN THE BEST INTERESTS OF THE
CORPORATION AND ITS SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS SHAREHOLDERS VOTE
"FOR" APPROVAL OF THIS PROPOSAL. ALL SHARES REPRESENTED BY DULY RETURNED PROXY
CARDS WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY OTHERWISE ON THEIR PROXY
CARDS.
14
<PAGE> 18
MATERIAL FEATURES OF THE ISOP
The purpose of the ISOP is to foster and promote the long-term
financial success of the Corporation (i) through the attraction and retention of
personnel of outstanding ability and the enhancement of the Corporation's
ability to develop and maintain a competent management team and (ii) by
providing incentive compensation opportunities that are competitive with those
of other organizations and enabling key personnel to participate in the
financial success of the Corporation through the ownership of Common Stock. The
ISOP provides for the grant of options to purchase shares of the Corporation's
Common Stock, including incentive stock options within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended.
Participation in the ISOP is limited to directors and full-time
employees of the Corporation and subsidiaries of the Corporation. As of March
21, 1997, 11 directors, 6 officers (two of whom were also directors) and 400
employees who were not also officers were eligible to participate in the ISOP.
The ISOP is administered by the Compensation Committee of the Board of
Directors (the "Committee"). Except as noted below, the Committee has sole
authority as to decisions regarding the ISOP. The Committee may establish rules
and regulations it deems necessary to administer the ISOP. All determinations
and actions by the Committee are final and conclusive for all purposes. The
Committee determines to whom (within the class of eligible persons) and when
options will be granted, the number of shares to be subject to each option
grant, the duration and price of each option, the time during which an option
may be exercised and, subject to the terms of the ISOP, the other terms and
conditions of the options. The discretion of the Committee is restricted,
however, with respect to grants of options to "insiders" of the Corporation, and
the ISOP provides for non-discretionary, automatic option grants to non-employee
directors. Grants of options to persons who are beneficial owners of more than
10% of the outstanding Common Stock or who are directors or officers of the
Corporation may be effected under the ISOP only upon the recommendation of the
Committee and approval by the Board of Directors. Further, pursuant to a
resolution adopted by the Board of Directors, without the approval of the Board
of Directors, the Committee may not grant to any person in a single grant
options to acquire more than 10,000 shares of Common Stock or in any number of
grants in one calendar quarter options to acquire in excess of 30,000 shares of
Common Stock in the aggregate. Each director who is not employed by the
Corporation is automatically granted an option covering 10,000 shares of Common
Stock upon his or her initial election to the Board of Directors and is
automatically granted an option covering an additional 2,000 shares every second
year thereafter following his or her re-election to the Board of Directors
("Outside Director Formula Grants").
The exercise price of options granted under the ISOP may not be less
than 100% of the fair market value of the Common Stock on the date of the grant
of such options. The aggregate fair market value of the Common Stock with
respect to which options are first exercisable by a recipient in any calendar
year may not exceed $100,000. In the case of an option granted to an employee
owning more than 10% of the outstanding Common Stock, the exercise price may not
be less than 110% of the fair market value of the Common Stock on the date of
grant of such option. Options granted prior to July 25, 1996 generally vest in
20% annual increments beginning on the second anniversary of the date of grant.
Those granted after July 25, 1996 generally vest in 20% annual increments
beginning on the first anniversary of the date of grant. No option may be
exercisable after the expiration of 10 years from the
15
<PAGE> 19
date of grant. Options granted under the Stock Option Plan are not transferable
other than by will or the laws of descent and distribution.
Since commencement of the ISOP, the Corporation has granted options
under the ISOP with fair market value exercise prices as follows (net of expired
or terminated options): Mr. Gathman -- 145,900 shares; Mr. Elderkin -- 119,750
shares; Mr. Kaiserian -- 29,000 shares; Mr. Rose -- 43,250 shares; all executive
officers as a group -- 364,400 shares; all non-employee directors -- 78,250
shares; and all other employees -- 710,666 shares. Mr. Lipson has received no
options under the ISOP. Benefits attributable to future grants of options under
the ISOP are not presently determinable because such benefits will depend upon
numerous variables, including, in the case of Outside Director Formula Grants,
whether the directors are re-elected, and in the case of other options, the
exercise of the Committee's discretion, and as to all options, the fair market
value of the Corporation's Common Stock on the dates of grant.
The ISOP may be amended by the Board of Directors without the approval
of the stockholders, except no action may be taken without the approval of the
stockholders to increase the aggregate number of shares of Common Stock that may
be issued under the ISOP, materially increase the benefits accruing to the
participants under the ISOP, or materially modify the requirements as to
eligibility for participation in the ISOP.
The amendments to the ISOP as proposed hereby will become effective
only upon shareholder approval. If the shareholders approve the proposed
amendments, the amended ISOP will terminate on May 22, 2007 or on such earlier
date as the Board of Directors may determine. After termination of the ISOP, no
grants may be effected. Previously made grants, however, will remain outstanding
in accordance with their terms and conditions and the terms and conditions of
the ISOP.
FEDERAL INCOME TAX CONSEQUENCES UNDER THE ISOP
The following is a brief description of the federal income tax
consequences of stock options which may be granted under the ISOP under present
tax laws.
Incentive Stock Options. Options issued under the ISOP to employees of
the Corporation are intended to qualify as incentive stock options ("ISOs") as
defined in section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"). There will be no federal income tax consequences to either the
recipient or the Corporation upon the grant of an ISO. Except as described
below, the recipient will not have to recognize any income upon the exercise of
an ISO, and the Corporation will not be allowed any deduction, as long as the
recipient does not dispose of the shares within two years from the date the ISO
was granted or within one year from the date the shares were transferred to the
recipient (the "holding period requirement"). Upon a sale of the shares after
the holding period requirement is satisfied, the recipient will recognize a
long-term capital gain (or loss) measured by the excess (or deficit) of the
amount realized from such sale over the option price of such shares, but no
deduction will be allowed to the Corporation. If a recipient disposes of shares
before the holding period requirement is satisfied, the recipient will recognize
ordinary income in the year of disposition, and the Corporation will be entitled
to a corresponding deduction, in an amount equal to the lesser of (a) the excess
of the fair market value of the shares on the date of exercise over the option
price of the shares or (b) the excess of the amount
16
<PAGE> 20
realized from such disposition over the option price of the shares. Where shares
are sold before the holding period requirement is satisfied, the recipient will
also recognize a capital gain to the extent that the amount realized from the
disposition of the shares exceeded the fair market value of the shares on the
date of exercise.
For alternative minimum tax purposes, regardless of whether the
recipient satisfies the holding period requirement, the excess of the fair
market value of the shares on the exercise date over the option price will be
treated as a positive adjustment to the recipient's alternative minimum taxable
income for the year the ISO is exercised. If the shares are disposed of in the
year the ISO was exercised, however, the positive adjustment taken into account
for alternative minimum tax purposes will not exceed the gain realized on such
sale.
Non-Qualified Stock Options. Options issued under the ISOP to directors
who are not employees of the Corporation cannot qualify as ISOs for federal
income tax purposes and will be treated as non-qualified stock options ("NSOs").
There will be no federal income tax consequences to either the recipient or the
Corporation upon the grant of an NSO. Upon the exercise of an NSO, the recipient
will recognize ordinary compensation income in an amount equal to the excess of
the fair market value of the shares on the date of exercise over the option
price of such shares, and the Corporation generally will be entitled to a
federal income tax deduction in the same amount.
3. RATIFICATION OF THE APPOINTMENT OF AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP, independent
public accountants, to serve as auditors for the year ending December 31, 1997.
KPMG Peat Marwick LLP has served as the Corporation's auditors and independent
accountants since 1995. Representatives of KPMG Peat Marwick LLP are expected to
be available at the Meeting to respond to appropriate questions and will be
given the opportunity to make a statement if they desire to do so. Ratification
of the selection of appointment of auditors is not required under applicable
law, but the shareholder vote with respect to this proposal will be considered
by the Board of Directors in selecting auditors for future years.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE CORPORATION'S
AUDITORS FOR THE CURRENT YEAR. ALL SHARES REPRESENTED BY DULY RETURNED PROXY
CARDS WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY OTHERWISE ON THEIR PROXY
CARDS.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended ("the
Exchange Act"), requires the Corporation's officers and directors, and persons
who own more than 10% of the Corporation's Common Stock to file reports of their
ownership and changes in their ownership of such securities with the Securities
and Exchange Commission ("SEC") and Nasdaq. Officers, directors and beneficial
owners
17
<PAGE> 21
of more than 10% of the Corporation's Common Stock are required by SEC
regulations to furnish the Corporation with copies of all such forms they file.
Based solely on the Corporation's review of such forms received by it,
or written representations from certain reporting persons that no Forms 5 were
required for those persons, the Corporation believes that, during the year ended
December 31, 1996, all filing requirements applicable to its officers, directors
and persons who own more than 10% of the Common Stock were complied with.
SHAREHOLDER PROPOSALS
Shareholders who intend to present proposals at the Corporation's
annual meeting of shareholders to be held in 1998 must submit their proposals to
the Secretary of the Corporation on or before December 12, 1997 in order for
their proposals to be eligible to be included in the proxy materials for the
meeting.
OTHER INFORMATION
Upon the request of any shareholder as of the Record Date, a copy of
the Corporation's annual report on Form 10-K for the year ended December 31,
1996, as filed with the Securities and Exchange Commission, will be supplied
without charge. To request a copy, please call or write to Investor Relations,
Integrated Systems Consulting Group, Inc., 575 E. Swedesford Road, Wayne,
Pennsylvania 19087, (610) 989-7171.
Dated: April 11, 1997
18
<PAGE> 22
LIST OF APPENDICES
<TABLE>
<CAPTION>
Appendix No.
------------
<S> <C>
Amended and Restated 1989 Incentive Stock Option Plan............................................ I
</TABLE>
<PAGE> 23
INTEGRATED SYSTEMS CONSULTING GROUP, INC.
AMENDED AND RESTATED 1989 INCENTIVE STOCK OPTION PLAN
1. Purpose of the Plan
The purposes of this plan are to foster and promote the long-term financial
success of the Company by (a) attracting and retaining key personnel of
outstanding ability by the granting of stock options; (b) strengthening the
Company's capacity to develop and maintain a competent management team; (c)
providing incentive compensation opportunities which are competitive with those
of other businesses; and (d) enabling key personnel to participate in the
financial success of the Company through the ownership of stock in the Company.
It is intended that stock options granted under this Plan shall be "incentive
stock options", as defined in Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"). All requirements of Code Section 422 and the
regulations issued thereunder are deemed a part of this Plan and any provision
hereof which is contrary to those requirements shall be null and void.
2. Definitions
(a) "Board" means the Board of Directors of the Company.
(b) "Committee" means a Committee appointed by the Board to
administer the Plan. The Committee shall consist of not less than
two persons who shall serve at the pleasure of the Board.
(c) "Company" means Integrated Systems Consulting Group, Inc., a
Pennsylvania corporation, and its Subsidiaries, if any.
(d) "Employee" means any person (including any officer of the
Company), who is employed on a full-time basis by the Company,
and any member of the Board or the Board of Directors of any
Subsidiary. For purposes of the Plan, employment on a full-time
basis means employment for 40 or more hours per week.
(e) "Exercise Period" means the period during which a Participant is
entitled to exercise a Stock Option granted to such Participant
under the Plan; which period shall neither begin prior to two (2)
years, nor end later than ten (10) years from the date of the
grant of such Option. Options granted to any Employee under this
Plan shall continue to be exercisable only so long as the
Participant continues to be an Employee, except as provided in
Section 7 hereof.
(f) "Fair Market Value" means the value of the Shares determined in
good faith by the Plan Administrator. If shares of the Stock are
listed on a stock exchange, such determination shall be made on
the basis of the closing sale price of such Shares on any stock
exchange on which such shares are listed. If
<PAGE> 24
shares of the Stock are not listed on a stock exchange, but are
traded on the over-the-counter market, such determination shall
be made on the basis of the mean between the bid and offer prices
for such shares on the over-the-counter market. In no case shall
such Fair Market Value be less than the par value of such Shares.
Fair Market Value of the Shares shall be determined without
regard to any restrictions other than a restriction which, by its
terms, will never lapse.
(g) "Offer" means a tender or exchange offer, other than one made by
the Company, for shares of Stock in the Company.
(h) "Participant" means any Employee who is selected by the Plan
Administrator to receive a Stock Option.
(i) "Plan" means the Amended and Restated 1989 Incentive Stock Option
Plan of the Company, including any amendments thereto.
(j) "Plan Administrator" means either the Board or a Board-appointed
Committee, whichever is designated from time to time to
administer the Plan under Section 3(a) hereof.
(k) "Reorganization Transaction" means a merger, consolidation or
combination of the Company with another corporation or entity or
any similar reorganization of the Company, the complete
liquidation of the Company, or the sale of all or substantially
all of the assets of the Company.
(l) "Shares" means the shares of Stock reserved for issuance or
transfer by the Company under the Plan as set forth in Section
4(a) hereof. The term "Shares" shall also include all shares of
Stock received with respect to Shares by a Participant pursuant
to a stock dividend, stock split, recapitalization or other
similar transaction.
(m) "Stock" means the Common Stock, par value $.005 per share, of the
Company.
(n) "Stock Option" or "Option" means an option to purchase Shares
granted under Section 6 hereof.
(o) "Subsidiary" means any corporation the majority of the
outstanding voting stock of which is owned, directly or
indirectly, by the Company.
(p) "Termination of Employment" means the time when the
employee-employer relationship between the Participant and the
Company is terminated for any reason, including, but not limited
to, a termination by resignation, discharge,
-2-
<PAGE> 25
death, disability, or retirement, but excluding such termination
where there is a simultaneous reemployment by either the Company
or a Subsidiary.
(q) "Vesting Schedule" means the dates when a Participant can
exercise the Options granted under this Plan, as set forth in
Section 6(c) hereof.
3. Administration of the Plan
(a) The Plan shall be administered under the direction of the Board.
The Board may at any time, in its sole discretion, appoint a
Committee of the Company which shall have all of the powers,
duties, and responsibilities of the Board of Directors under this
Plan and shall be subject to all of the terms and conditions of
this Plan applicable to the Board of Directors. The Committee, if
appointed, shall consist of two or more persons who shall serve
at the pleasure of the Board of Directors. Such persons may or
may not be Directors of the Company. The Board shall determine,
from time to time, whether the Plan shall be administered by the
Board or the Committee, and whichever body is so designated
shall be the Plan Administrator hereunder.
(b) Subject to the provisions of the Plan, the Plan Administrator
shall have exclusive power to select the Employees who are to be
Participants under the Plan as set forth in Section 5 hereof and
to determine the Options to be granted to the Participants
selected and the time or times when, and terms, conditions and
restrictions subject to which, such Options will be granted.
(c) Decisions and determinations by the Plan Administrator shall be
final and binding upon all persons, including, but not limited
to, the Company and its shareholders, Participants and their
personal representatives, heirs and assigns, and other Employees.
The Plan Administrator shall have the authority to interpret the
Plan, establish and revise rules and regulations relating to the
Plan, and make any other determinations that it believes
necessary or advisable for the administration of the Plan;
provided, however, that no such rules, regulations or
determinations are inconsistent with the terms of this Plan.
(d) The provisions of the By-laws of the Company governing the number
of Directors of the Board required for action to be taken by the
Board at a meeting and the requirements for voting by Directors
at a meeting at which a quorum is present, or for acting by their
written consent, shall be complied with by the Board in order to
take valid actions under the Plan. Notwithstanding anything in
the By-laws to the contrary, a majority of the Committee shall
constitute a quorum, and the acts of a majority of the members of
the Committee present at any meeting at which a quorum is
present, or acts approved in writing by a majority of the
Committee without a meeting, shall be the acts of the Committee.
-3-
<PAGE> 26
(e) All expenses and liabilities incurred by the Plan Administrator
in the administration of the Plan shall be borne by the Company.
The Plan Administrator may employ attorneys, consultants,
accountants, or other persons to render services in connection
with the Plan, and the Company, the Board, the Committee, and the
members of the Board and Committee shall be entitled to rely upon
the advice, opinions, or valuations of any such persons. Neither
the Company, the Board, the Committee, nor any member of the
Board or Committee shall be personally liable for any action,
determination, or interpretation taken or made in good faith with
respect to the Plan, and all members of the Board and Committee
shall be indemnified by the Company with respect to any such
liability to the fullest extent permitted by the By-laws of the
Company.
4. Stock Subject to the Plan
(a) The maximum number of shares of Stock which may be issued or
transferred by the Company under the Plan and which shall be
reserved for such issuance shall be 1,250,000 Shares.
(b) The Board may reserve authorized but unissued shares of Stock, or
treasury shares of Stock, not otherwise reserved or restricted,
for issuance under this Plan. Shares reserved for issuance or
transfer under outstanding Stock Options under this Plan which
expire unexercised or which are cancelled shall again become
reserved for issuance under this Plan.
(c) The approval of this Plan by the Board shall constitute the
Board's conclusive judgment and determination that, when Shares
have been issued to a Participant in accordance with the terms
and conditions of the Plan, such Shares shall be considered to be
issued for full and adequate consideration and shall be fully
paid and nonassessable Stock, and that such consideration shall
be accounted for in accordance with the Company's standard
accounting practice.
-4-
<PAGE> 27
5. Eligibility
The Plan Administrator shall from time to time, in its absolute discretion,
select Participants to whom Stock Options shall be granted from among those
Employees who are key personnel of the Company. No Stock options shall be
granted to any individual who, at the time the Stock Option is granted, owns
(after application of the ownership attribution rules contained in Code Section
424(d)) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company, unless the purchase price
per Share under such Option is at least 110% of the Fair Market Value of such
Share on the date the Option is granted, and such Option is not exercisable
until after the expiration of five (5) years from the date on which such Option
is granted. Moreover, the aggregate fair market value (determined as of the time
the Option is granted) of the shares of stock of the Company with respect to
which incentive stock options (as defined in Code Section 422) are exercisable
for the first time by any Participant during any calendar year (pursuant to all
incentive stock option plans of the Company) shall not exceed $100,000.
6. Grant of Stock Option; Agreement
At the time an Option is granted pursuant to this Plan, each Participant granted
an Option shall enter into an agreement with the Company (an "Incentive Stock
Option Agreement"), in a form approved by the Plan Administrator, which shall
set forth the general terms and conditions of the Options granted to the
Participant, and such other terms and conditions as the Plan Administrator
shall, in its sole discretion, determine. A copy of a form of Incentive Stock
Option Agreement is attached hereto as Exhibit A. The Incentive Stock Option
Agreement shall specify the following terms and conditions with respect to the
Option:
(a) Number of Shares. The number of Shares issuable or transferable
to the Participant upon the exercise of the Option.
(b) Price. The purchase price per Share deliverable upon the exercise
of the Option, which shall not be less than the Fair Market Value
of the Shares on the date the Option is granted. The purchase
price may be paid in cash, by check or in any other form as may
be deemed acceptable by the Plan Administrator.
(c) Exercise Period and Vesting Schedule. The Stock Options granted
under this Plan shall be exercisable by the Participant in
accordance with the following schedule (the "Vesting Schedule"):
<TABLE>
<CAPTION>
For Options granted before July 25th, 1996:
<S> <C>
2 years from date of grant: 20% of Shares
3 years from date of grant: 40% of Shares
4 years from date of grant: 60% of Shares
5 years from date of grant: 80% of Shares
6 years from date of grant: 100% of Shares
</TABLE>
-5-
<PAGE> 28
<TABLE>
<CAPTION>
For Options granted on or after July 25th, 1996:
<S> <C>
1 year from date of grant: 20% of Shares
2 years from date of grant: 40% of Shares
3 years from date of grant: 60% of Shares
4 years from date of grant: 80% of Shares
5 years from date of grant: 100% of Shares
</TABLE>
(d) Discretion of Plan Administrator. Notwithstanding anything to the
contrary in this Section 6(d), the Plan Administrator, at any
time and in its sole discretion, may establish the Vesting
Schedule for any Stock Options granted under this Plan and may
also provide for the acceleration of the Vesting Schedule with
respect to Stock Options previously granted under the Plan to any
Participant and the acceleration of the right to exercise Stock
Options prior to vesting (provided such Stock is subject to the
Company's right, but not the obligation, to repurchase such Stock
if vesting does not subsequently occur), provided that such grant
or acceleration shall not impair the qualification of such Stock
Option under Code Section 422.
(e) Voluntary. The Participant shall expressly acknowledge and agree
that participation in this Plan is voluntary, and that the
Participant will be solely responsible for all taxes to which he
or she may become subject as a consequence of participation in
the Plan, the exercise of an Option or the ownership, sale,
transfer or other disposition of Shares acquired pursuant to the
exercise of an Option issued hereunder.
(f) 30-Day Waiting Period With Respect to Options Granted Prior to
July 25, 1996. With respect only to Options granted hereunder
prior to July 25, 1996, there shall be a 30-day period between
the date on which the Participant exercises the Option pursuant
to this Plan, and the issuance or transfer of the Shares covered
by such Option to the Participant, and the Participant must
remain an Employee at all times during such 30-day period in
order to receive the Shares.
(g) Share Certificates Held by Company. The original of any Share
certificates that are issued to a Participant upon exercise of a
Stock Option granted under the Plan may be held by the Plan
Administrator as custodian for the Participant, in the Plan
Administrator's sole discretion. The issuance of such
certificates shall be recorded on the Company's stock ledger book
and other records so that the Participant is accorded all rights
of a holder of Shares. At a Participant's request, the Plan
Administrator shall furnish to the Participant a copy of the
Share certificate(s) held by the Plan Administrator as custodian
for the Participant.
-6-
<PAGE> 29
(h) Other. Such other terms and conditions not inconsistent with the
Plan as the Plan Administrator shall specify.
7. Termination of Employment
(a) Death. If the Participant dies while an Employee, any Option
which was exercisable, in accordance with the Vesting Schedule,
by such Participant on the date of such Participant's death shall
be exercisable by such Participant's estate, heirs or legatees at
any time prior to the expiration of one year after the date of
the Participant's death, but in no event after the expiration of
the Exercise Period applicable to such Option.
(b) Total Disability. If any Participant becomes permanently and
totally disabled within the meaning of Code Section 22(e)(3)
while he or she is an Employee, any Option held by the
Participant which was exercisable, in accordance with the Vesting
Schedule, by the Participant on the date of such disability shall
be exercisable for a period of one year from the date such
Participant ceases Employment, but in no event after the
expiration of the Exercise Period applicable to such Option. If
the Participant dies during such one-year period, the executor,
personal representative, distributee or legatee of the
Participant's estate shall have the right to exercise such Option
during the remainder of such period.
(c) Other. If there is a Termination of Employment of a Participant
for any reason not specified in Sections 7(a) or 7(b) hereof, any
Option which was exercisable, in accordance with the Vesting
Schedule, by such Participant on the date of such Termination
shall be exercisable at any time prior to 30 days from the date
of such Termination, but in no event after the termination of the
Exercise Period applicable to such Option. If the Participant
dies during such 30-day period, the executor, personal
representative, legatee or distributee of the Participant's
estate shall have the right to exercise such Option during the
remainder of such period. The Plan Administrator shall have
discretion with respect to applying this Section 7(c) to members
of the Board of Directors who are Participants under the Plan.
-7-
<PAGE> 30
8. Leave of Absence
If a Participant is granted a leave of absence (as defined in Regulations
Section1.421-7(b)(2)) by the Company, the Plan Administrator may make such
provision respecting continuance of any Stock Option held by such Participant
while such Participant continues as an Employee as it may deem advisable, except
that in no event shall any Option become exercisable after the expiration of the
Exercise Period applicable to such Option.
9. Compliance with Applicable Laws
No Stock Options shall be granted, and no Shares shall be issued or transferred
by the Company to a Participant pursuant to the Plan unless the Plan
Administrator, in its sole discretion, shall have first determined that all
registrations, approvals, exemptions, and any other action required by law to be
taken with respect to the Plan shall have been accomplished, including, but not
limited to, such action, if any, as is then required to comply with the
provisions of the Securities Act of 1933, the Securities Exchange Act of 1934,
any applicable state laws, and the requirements of any exchange on which the
Stock may, at the time, be listed.
10. Employment
No employee or other person shall have any claim or right to be granted a Stock
Option under the Plan. Nothing herein contained shall at any time be deemed to
give any Employee the right to be retained in the employ of the Company,
interfere with the right of the Company to discharge any Employee, give to the
Company the right to require any Employee to remain in its employ, or interfere
with any Employee's right to terminate employment.
11. Corporate Changes
(a) If any change in the number, class, rights or designation of
outstanding shares of Stock occurs by reason of a stock split,
recapitalization, stock dividend, reclassification, or other
similar transaction, the maximum aggregate number and class of
Shares reserved under the Plan or the exercise price of all
outstanding Stock Options may be appropriately adjusted by the
Board whose determination in such regard shall be conclusive.
When such adjustment is made, the number of Shares issuable or
transferable to Participants upon the exercise of outstanding
Stock Options, or the exercise price of such Options, as the case
may be, shall likewise be appropriately adjusted by the Board.
(b) If the Company becomes a party or subject to a Reorganization
Transaction, or if there is an Offer for shares of the Stock, the
Board may: (1) determine what Participants shall be entitled to
receive, in substitution for Shares issuable or transferable to
them upon the exercise of outstanding Stock Options, in the
-8-
<PAGE> 31
form of stock, securities, cash or other property to be received
by owners of Stock of the Company as a result of such
Reorganization Transaction or Offer; provided, however, that the
aggregate fair market value of the stock, securities, cash or
other property subject to the Options immediately after such
substitution shall be no greater than the aggregate Fair Market
Value of the Shares subject to such Options immediately before
such substitution; (2) upon written notice to Participants,
provide that the Participant's Options shall be terminated unless
exercised in accordance with the Plan within thirty (30) days
after the date of such notice; or (3) take any other action with
respect to any outstanding Stock Options which it deems to be
appropriate; provided that under no circumstances shall any such
Board determination increase the length of the Exercise Periods
applicable to the Options.
12. Transferability of Shares
(a) If a Participant acquires Shares pursuant to the terms of this
Plan and there is, subsequently, a Termination of Employment with
the Company, either voluntarily or involuntarily, such Employee
shall be obligated to offer to sell within fifteen (15) days to
the Company and the Company shall be obligated to purchase from
the Participant the Shares so acquired (other than Shares of the
Company for which there shall be a public market). If the
termination is by reason of the death of the Participant, the
obligation to offer the Shares shall pass with the Shares to the
Participant's executor, legal representative, distributee, or
legatee. At the discretion of the Plan Administrator this Section
12 shall not apply to members of the Board of Directors who are
Participants under the Plan.
Closing with respect to the repurchase of the Shares described in
the prior paragraph shall take place at the offices of the
Company within thirty (30) days of the date of Termination of
Employment (or, in the case of the death of the Participant,
within thirty (30) days of the exercise of the Option pursuant to
Section 7(a) hereof). At the sole discretion of the Company,
however, the date of Closing may be postponed until the first
business day following the date which is the one year anniversary
of the date the Shares were transferred to the Participant
pursuant to the Option.
The purchase price for the Shares to be purchased hereunder,
other than in the event the Participant is dismissed from
Employment with the Company for cause, shall be the Fair Market
Value of such Shares (determined in accordance with Section 2(f)
hereof) as of the date of Termination of Employment. If a
Participant is dismissed from Employment with the Company for
cause, the purchase price of those Shares acquired by the
-9-
<PAGE> 32
Employee pursuant to the exercise of Stock Options shall be equal
to their Fair Market Value as determined above or the
Participant's exercise price for those Shares, whichever is less.
(b) The Shares acquired pursuant to the Plan shall and all share
certificates representing Shares so acquired shall contain a
legend stating that transfer of such Shares is restricted in
accordance with the terms of this Plan.
13. Miscellaneous
(a) Effective Date and Duration of the Plan. This Plan shall become
effective upon the approval thereof by the holders of a majority
of the outstanding shares of stock of the Company entitled to
vote thereon within twelve months after the Plan is adopted by
the Board of Directors. Unless sooner terminated, the Plan shall
terminate ten years from the date of shareholder approval, or the
date the Plan is adopted, whichever is earlier.
(b) Effect Upon Other Plans. The adoption of the Plan shall not
affect any stock option or other compensation or incentive plan
in effect for the Company or any Subsidiary, and the Plan shall
not preclude the Board from establishing any other forms of
incentive, bonus or other compensation for Employees.
(c) Termination. The right to grant Stock Options under the Plan
shall terminate automatically at the close of business on the
tenth anniversary of the effective date of the Plan, and
thereafter, the function of the Plan Administrator shall be
limited to the administration of Options previously granted. The
Board shall have the right to suspend or terminate the Plan at
any time provided that no action shall, without the consent of
the Participant, adversely affect any rights or obligations under
any Options previously granted to the Participant. The Plan may
be terminated at any time by the shareholders of the Company in
the manner provided by law.
(d) Amendment of the Plan. The Board may modify or amend the Plan in
any respect, except that without shareholder approval the Board
may not, unless otherwise provided specifically herein, (1)
increase the maximum number of Shares set forth in Section 4(a)
hereof; (2) withdraw administration of the Plan from the Plan
Administrator constituted in the manner provided in Section 3(a)
hereof; (3) materially increase the benefits accruing to
Participants; or (4) materially modify the requirements as to
eligibility for participation in the Plan as set forth in Section
5 hereof. Any modification or amendment of the Plan shall not,
without the consent of the Participant, adversely affect any
rights or obligations under Options previously granted to the
Participant. Subject to the
-10-
<PAGE> 33
foregoing, the Plan may be amended at any time by the
shareholders of the Company in the manner provided by law. The
Plan Administrator may, with the consent of a Participant, amend
an outstanding Option held by a Participant, in a manner not
inconsistent with the Plan.
(e) Assignability of Options. No Stock Options shall be assignable or
transferable by a Participant except by will or by the laws of
descent and distribution. During the life of the Participant,
Options shall be exercisable only by such Participant. No
Participant shall have any rights as a shareholder with respect
to any Shares subject to an Option until the date of issuance of
stock certificates to such Participant for such Shares. Except as
otherwise expressly provided herein, no adjustment shall be made
for dividends or other shareholder rights for which the record
date is prior to the date such stock certificates are issued.
(f) Binding Effect. Any delivery of Shares upon the exercise of Stock
Options and any delivery of cash in settlement of an Option to
any Participant or former Participant or such Participant's legal
representative or to any beneficiary of such Participant in
accordance with the provisions of this Plan shall be in full
satisfaction of all claims with respect to such Options which
such Participant, representative or beneficiary may have against
the Company, Plan Administrator or any member of the Plan
Administrator. This Plan shall be binding upon the beneficiaries,
heirs, executors, administrators, distributees and assigns of the
Participants and the successors and assigns of the Company.
(g) Governing Law. This Plan shall be construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania.
(h) Compliance with Securities and Exchange Commission Rule 16b-3.
Notwithstanding anything contained in this Plan to the contrary,
commencing July 25, 1996, no Options shall be granted to any
person who may be deemed to be an "insider" within the meaning of
Securities and Exchange Commission Rule 16b-3 except as follows:
(i) Formula Plan for Outside Directors. Each outside
member of the Board of Directors (i.e., a director who is not
employed by the Company) shall automatically be granted an
Option for 10,000 Shares upon initial election to the Board of
Directors, and each outside member of the Board of Directors
shall automatically be granted an Option for 2,000 Shares
every two years thereafter following re-election to the
Company's Board of Directors.
-11-
<PAGE> 34
(ii) Other Insiders. All other "insiders" shall be
granted Options only upon recommendation of the Committee and
approval by the Board of Directors.
(iii) It is the intent of this subsection 13(h) that
profits resulting from the exercise of Options granted to
"insiders" shall not be subject to the short-swing profit
recovery provisions of section 16 of the Securities Exchange
Act but shall instead be exempt from such provisions pursuant
to Rule 16b-3 or otherwise. Accordingly, this subsection 13(h)
shall be construed and administered in such a manner as to
result in the foregoing.
-12-
<PAGE> 35
[INTEGRATED SYSTEMS CONSULTING GROUP LOGO]
PROXY
INTEGRATED SYSTEMS CONSULTING GROUP, INC.
This Proxy is Solicited by the Board of Directors In Connection With the
Annual Meeting of Shareholders
9:00 A.M. (E.D.T.)
May 23, 1997
PLACE: The Philadelphia Marriott West
111 Crawford Avenue
West Conshehoken, PA
PROXY: DAVID D. GATHMAN and DAVID S. LIPSON, and each of them, are hereby
appointed by the undersigned as proxies, with full power of substitution, to
vote all the shares of Common Stock held of record by the undersigned on
February 24, 1997 at the Annual Meeting of Shareholders of Integrated Systems
Consulting Group, Inc. or at any adjournment(s) of the meeting, on each of the
items on the reverse side and in accordance with the directions given therein.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 36
<TABLE>
<C> <S>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED SHAREHOLDER. Please mark
IF NO DIRECTIONS ARE GIVEN WITH RESPECT TO ANY OF SUCH ITEMS, THEN THE SHARES REPRESENTED BY THIS PROXY your vote as
WILL BE VOTED FOR ITEMS 1, 2 AND 3. indicated in
this example [X]
1. ELECTION OF DIRECTORS.
FOR all nominees WITHHOLD NOMINEES: Frank Baldino, Jr., Melvyn E. Bergstein, Donald R. Caldwell,
listed to the right AUTHORITY Mark J. Denino, David D. Gathman, David S. Lipson, James L. Mann,
(except as indicated to to vote for all nominees Donna J. Pedrick, David Fehr, Michael D. Stern, Edward S.J. Tomezsko.
the contrary) listed to the right
WITHHELD FOR: To withhold authority to vote for any individual nominee,
[ ] [ ] write his or her name in the space below (this proxy will be voted for
each nominee for whom authority to vote is not withheld):
-----------------------------------------------------------------------
2. Proposal to amend the Corporation's 3. Proposal to ratify the appointment of KPMG 4. In their discretion, the Proxies are
Amended and Restated 1989 Incentive Peat Marwick, LLP, as independent auditors. authorized to vote upon such other
Stock Option Plan. business as may properly come before
the meeting and any adjournment(s)
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN thereof.
[ ] [ ] [ ] [ ] [ ] [ ]
Signature Signature Date
------------------------------------------------ ---------------------------------------- ----------------
NOTE: Please sign as name appears hereon. When shares are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate
name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person.
- ----------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
</TABLE>
