INTEGRATED SYSTEMS CONSULTING GROUP INC, PRER14A, 1998-04-08

INTEGRATED SYSTEMS CONSULTING GROUP INC
PRER14A, 1998-04-08
COMPUTER INTEGRATED SYSTEMS DESIGN

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<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:

[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)
(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-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):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:

<PAGE> 2

April 20, 1998

Dear Shareholders:

It is a pleasure to invite you to the annual meeting of the
shareholders of Integrated Systems Consulting Group, Inc., for the year ended
December 31, 1997 (the "Meeting"), which will be held at The Philadelphia
Marriott West, 111 Crawford Avenue, West Conshohocken, Pennsylvania, on
Wednesday, May 20, 1998 at 8:00 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.

Please note that the Board of Directors of the Corporation recommends a
vote "FOR" the election of the eleven directors to serve until the Annual
Meeting of shareholders for the year ending December 31, 1998, "FOR" the
adoption of certain amendments to the Corporation's By-laws, and "FOR" the
ratification of the appointment of KPMG Peat Marwick LLP as independent public
accountants of the Corporation for the year ending December 31, 1998.

In order 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 year ended
December 31, 1997 is being distributed to shareholders with the attached Proxy
Statement.

Sincerely,

/s/ David S. Lipson
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

NOTICE IS HEREBY GIVEN that 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 Wednesday, May 20, 1998 at 8:00 a.m. (the "Meeting"), for the
following purposes:

1. To elect eleven directors.

2. To amend the Corporation's By-laws by deleting Section
2.02(b)(2) thereof, which currently allows the holders of 25%
of the Corporation's Common Stock to call special shareholder
meetings.

3. To amend Section 9.01 of the Corporation's By-laws to
authorize the Board of Directors to amend or repeal the
By-laws and to adopt new By-laws.

4. To amend Section 2.06 of the Corporation's By-laws to reduce
the affirmative shareholder vote required for various
corporate actions to a majority of the votes cast at
shareholders meetings.

5. To amend Section 3.02 of the Corporation's By-laws to provide
for the election of directors by plurality vote of the
shareholders and to allow vacancies on the Board of Directors
to be filled by vote of the remaining directors.

6. To ratify the appointment of KPMG Peat Marwick LLP as the
independent public accountants to audit the Corporation's
accounts for the current year.

7. 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 27,
1998 as the record date for determining shareholders entitled to notice of and
to vote at the Meeting.

By Order of the Board of Directors,

/s/ David D. Gathman
David D. Gathman

Executive Vice President, Finance
and Administration, Chief Financial
Officer and Secretary
Wayne, Pennsylvania
April 20, 1998

YOUR VOTE IS IMPORTANT

Whether or not you plan to attend the Meeting, please complete, date,
sign and mail your proxy card promptly in the enclosed postage paid envelope.
Returning a proxy will ensure a quorum and will not deprive you of your right to
attend the Meeting and vote your shares in person.

<PAGE> 4

INTEGRATED SYSTEMS CONSULTING GROUP, INC.

575 E. SWEDESFORD ROAD
WAYNE, PENNSYLVANIA 19087

-------------------------------

PROXY STATEMENT
-------------------------------

ANNUAL MEETING OF SHAREHOLDERS
MAY 20, 1998

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
Wednesday, May 20, 1998 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 20, 1998.

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 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 four amendments to the Corporation's By-laws and the
ratification of the appointment of auditors for the year ending December 31,
1998 that is expected to be presented for consideration at the Meeting. If other
matters properly come before the Meeting, however, 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" each of the four proposals to amend
the Corporation's By-laws; and (iii) "FOR" the ratification of the appointment
of KPMG Peat Marwick LLP as the Corporation's auditors for the year ending
December 31, 1998.

<PAGE> 5

RECORD DATE AND VOTING SECURITIES

The Board of Directors has fixed the close of business on February 27,
1998 as the record date (the "Record Date") for the determination of the
shareholders of the Corporation entitled to notice of, and to vote at, the
Meeting. On the Record Date, there were 7,983,587 shares of the Corporation's
common stock, $0.005 par value (the "Common Stock") issued and outstanding,
which are the only securities of the Corporation entitled to vote at the
Meeting. The shareholders of record on the Record Date will be entitled to one
vote per share of Common Stock on each matter submitted to the shareholders at
the Meeting.

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 shall constitute a quorum for the 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; (ii) the affirmative vote at the Meeting, in person or by proxy, by the
holders of a majority of shares of Common Stock of the Corporation issued and
outstanding on the Record Date, will be required for approval of each of the
four By-law amendments; and (iii) 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 ratify the appointment of KPMG
Peat Marwick LLP as auditors for the year ending December 31, 1998.

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.

Abstentions and broker non-votes will have the same effect as an
"Against" vote with respect to the outcome of the election of directors, the
approval of the four amendments to the Corporation's By-laws, and the
ratification of the appointment of auditors.

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<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 of the Corporation individually; (iii)
each named executive officer (as defined under "Executive Compensation"); and
(iv) all current 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) 2,917,879 36.5%
575 East Swedesford Road
Wayne, Pa 19087

Technology Leaders II (3) 1,209,955 14.8%
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087

Safeguard Scientifics, Inc. (4) 756,025 9.3%
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087

Warrant and Stock Trust (5) 370,137 4.4%
510 Williamson Road
Gladwyne, PA 19035

Melissa A. Clancey (6) 18,300 *

David F. Elderkin (7) 104,050 1.3%

David D. Gathman (8) 103,184 1.3%

Edward P. Kaiserian (9) 25,200 *

Kathleen D. Kinka -- *

Jay M. Rose (10) 39,150 *

Victor E. Stambaugh (11) 26,100 *

Frank Baldino, Jr., Ph.D. (12) 8,000 *

Melvyn E. Bergstein (13) 13,434 *

Donald R. Caldwell (14) 15,390 *
</TABLE>

3
<PAGE> 7

<TABLE>
<CAPTION>
<S> <C> <C>
Mark J. DeNino (15) 2,032 *

David S. Fehr (16) 2,000 *

James L. Mann (17) 11,000 *

Donna J. Pedrick (18) 3,000 *

Michael D. Stern (19) 385,656 4.6%

Edward S.J. Tomezsko, Ph.D. (20) 16,100 *

All executive officers and directors 3,690,475 43.5%
as a group (17 persons) (21)
- ---------------------

</TABLE>

* Represents less than 1% of the outstanding Common Stock.

(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 7,983,587 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. Solely 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 (19). 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 (19).

(6) Includes 8,500 shares of Common Stock issuable pursuant to exercisable
options.

4
<PAGE> 8

(7) Includes 8,950 shares of Common Stock issuable pursuant to exercisable
options.

(8) Includes 75,084 shares of Common Stock issuable pursuant to exercisable
options.

(9) Includes 9,400 shares of Common Stock issuable pursuant to exercisable
options.

(10) Includes 28,150 shares of Common Stock issuable pursuant to exercisable
options.

(11) Includes 16,400 shares of Common Stock issuable pursuant to exercisable
options.

(12) Includes 3,000 shares of Common Stock issuable pursuant to exercisable
options.

(13) Includes 3,000 shares of Common Stock issuable pursuant to exercisable
options.

(14) 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.

(15) 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.

(16) Includes 2,000 shares of Common Stock issuable pursuant to exercisable
options.

(17) Includes 3,000 shares of Common Stock issuable pursuant to exercisable
options.

(18) Includes 1,500 shares of Common Stock issuable pursuant to exercisable
options.

(19) 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 900
shares of Common Stock issuable pursuant to exercisable options.

(20) Includes 8,100 shares of Common Stock issuable pursuant to exercisable
options.

(21) Includes (i) an aggregate of 167,984 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.

5
<PAGE> 9

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 duly elected and qualified. The nominees for election to the Board of
Directors are named in the table below. All of 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.

DIRECTOR POSITION(S) WITH
NAME AGE SINCE THE CORPORATION
---- --- ----- ---------------
<S> <C> <C> <C>
David S. Lipson 54 1988 Chairman of the Board of
Directors, Chief Executive
Officer, President and
Treasurer

David D. Gathman 50 1990 Executive Vice President,
Finance and Administration,
Chief Financial Officer,
Secretary, Assistant
Treasurer and Director

David S. Fehr 62 1996 Acting Chief Operating
Officer and Director

Frank Baldino, Jr., Ph.D. 44 1995 Director

Melvyn E. Bergstein 56 1995 Director

Donald R. Caldwell 51 1995 Director

Mark J. DeNino 44 1995 Director

James L. Mann 63 1995 Director

Donna J. Pedrick 48 1994 Director

Michael D. Stern 49 1995 Director

Edward S.J. Tomezsko, Ph.D. 63 1988 Director
</TABLE>

6
<PAGE> 10

CERTAIN BIOGRAPHICAL AND OTHER INFORMATION REGARDING THE CORPORATION'S
DIRECTORS.

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 30 years of industry experience in executive
management and sales and marketing. His previous employers include IBM, Control
Data Corporation, Dun & Bradstreet Computer Services, SunGard Data Systems Inc.
("SunGard") and Digital Equipment Corporation. Mr. Lipson currently serves as
director of Prescient Systems.

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. Mr. Gathman currently serves as a director of LAN & Computer
Integrators, Inc.

DAVID S. FEHR has been Acting Chief Operating Officer since February
1998. He 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.

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 Pharmacopoeia, 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). Mr. Caldwell is a director of
Compucom, Diamond Technology Partners Consulting, Inc., Quaker Chemical
Corporation, and Safeguard, as well as one privately held company.

7
<PAGE> 11

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. and CRW Financial, Inc., as well as seven privately held
companies.

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 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 and currently serves as a director. 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 1986.

GENERAL INFORMATION REGARDING THE BOARD OF DIRECTORS

The Board of Directors held four regular meetings and one special
meeting during 1997. None of the directors attended fewer than 75% of the
meetings of the Board of Directors and committees of which he or she was a
member, except for Dr. Baldino and Mr. Bergstein.

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 Corporation's Stock Option Plan. The current members of the Compensation
Committee are Ms. Pedrick (Chairperson) and Mr. Bergstein. The Compensation
Committee held one meeting during 1997.

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

8
<PAGE> 12

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 1997.

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 1997.

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. A resolution adopted by
the Corporation's Board of Directors on July 25, 1996 provides that, starting
July 25, 1996 and going forward from that date, each non-employee director
shall automatically be granted an option covering 10,000 shares of Common Stock
upon his or her initial election to the Board of Directors, and each
non-employee director shall automatically receive an option covering an
additional 2,000 shares of Common Stock every two years thereafter following
his or her re-election to the Board. Mr. Caldwell has declined receipt of all
such compensation.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the year ended December 31, 1997, DLB Systems, Inc. ("DLB")
purchased approximately $418,000 in services from the Corporation. On October
28, 1997, Premier Research World Wide ("PRWW") purchased all of the assets of
DLB at which time DLB changed its name to Alermon, Inc. At the time of that
transaction, DLB had already purchased the above mentioned services from the
Corporation. Safeguard Scientifics, Inc., a beneficial owner of more than 5% of
the outstanding shares of Common Stock of the Corporation, was the beneficial
owner of more than 10% of the voting rights of DLB at the time of the purchase
of the Corporation's services. In addition, at the time of the purchase of the
Corporation's services, Donald R. Caldwell, a director of the Corporation, was
also a director and shareholder of DLB.

Diamond Technology Partners Consulting, Inc. ("Diamond") purchased
approximately $2,100,000 in services from the Corporation in 1997. As of the
Record Date, Melvyn Bergstein, a director of the Corporation, is the beneficial
owner of more than 10% of the voting rights of Diamond. In addition, Safeguard
Scientifics, Inc., a beneficial owner of more than 5% of the outstanding shares
of Common Stock of the Corporation, is the beneficial owner of more than 10% of
the voting rights of Diamond.

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<PAGE> 13

EXECUTIVE OFFICERS OF THE CORPORATION

The names and ages of the executive officers of the Corporation as of
the Record Date and their positions with the Corporation are as follows:

NAME AGE POSITION(S)
---- --- -----------

<S> <C> <C>
David S. Lipson 54 Chairman of the Board of Directors,
Chief Executive Officer, President
and Treasurer

David D. Gathman 50 Executive Vice President, Finance
and Administration, Chief Financial
Officer, Secretary, Assistant
Treasurer and Director

David S. Fehr 62 Acting Chief Operating Officer

Melissa A. Clancey 34 Vice President, Human Resources

David F. Elderkin 44 Vice President, Technology and
Assistant Secretary

Edward P. Kaiserian 45 Vice President, Client Services

Kathleen D. Kinka 44 Vice President, Sales

Jay M. Rose 46 Vice President and General Manager,
Systems and Networking Practice

Victor E. Stambaugh 43 Vice President, Marketing

</TABLE>

CERTAIN BIOGRAPHICAL INFORMATION REGARDING THE CORPORATION'S EXECUTIVE OFFICERS

DAVID S. LIPSON. See "Election of Directors."

DAVID D. GATHMAN. See "Election of Directors."

DAVID S. FEHR. See "Election of Directors."

10
<PAGE> 14

MELISSA A. CLANCEY joined the Corporation in May 1990 and has served as
Vice President, Human Resources since October 1997. Prior to this position, she
served as Director of Recruiting from November 1996 to September 1997, Account
Executive from November 1996 to September 1997, Technical Services Manager from
October 1991 to December 1994, and Senior Consultant from May 1990 to September
1991. In her current position, Ms. Clancey is responsible for the strategic
direction for both the human resources and recruiting functions.

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. Mr. Kaiserian is responsible for the management and
delivery of the Corporation's application development consulting services.

KATHLEEN D. KINKA joined the Corporation in July 1997 and has served as
Vice President, Sales since that time. Prior to joining the Corporation, Ms.
Kinka worked for Sarnoff, Inc. as Director of Business Development responsible
for sales, strategic and business development, and international licensing
negotiations. Before that, Ms. Kinka spent 13 years with Digital Equipment in
various roles, most recently as Director, International Trade Development and
Policy, Washington D.C. Trade Office. She has vast experience in sales, sales
management, start-up ventures, and domestic and international business
development. Ms. Kinka is responsible for the development, operation, and
management of the Corporation's sales organization.

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 Networking Practice 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. Mr. Rose is responsible for sales, management and
delivery of the Corporation's systems and networking consulting services.

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.

11
<PAGE> 15

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, 1997 (the "named executive
officers"):

LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION (1) SECURITIES
NAME AND ----------------------- UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION
- ------------------ ---- ------ ----- ------- ------------

<S> <C> <C> <C> <C> <C>
David S. Lipson 1997 $ 200,000 $ 56,250 -- $ 121,880 (2)
Chairman, Chief Executive 1996 200,000 79,650 -- 147,927 (2)
Officer, President and 1995 200,000 75,000 -- 120,541 (2)
Treasurer

David D. Gathman 1997 100,000 75,000 2,500 3,200 (3)
Executive Vice President, 1996 100,000 76,860 -- 1,974 (3)
Finance and Administration, 1995 100,000 46,471 137,400 1,411 (3)
Chief Financial Officer,
Secretary and Assistant Treasurer

Edward P. Kaiserian 1997 127,300 84,688 2,000 3,200 (3)
Vice President, Client Services 1996 100,000 114,205 -- 1,500 (3)
1995 75,000 108,734 9,000 1,500 (3)

Jay M. Rose 1997 150,000 71,250 2,000 3,200 (3)
Vice President and General 1996 100,000 183,904 -- 1,597 (3)
Manager, Systems and 1995 4,964 (4) 14,167 41,250 --
Networking Practice

Victor E. Stambaugh 1997 91,667 55,000 1,000 3,172 (3)
Vice President, Marketing 1996 75,000 76,860 -- 1,474 (3)
1995 53,000 50,513 3,000 1,334 (3)
</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 $115,900, $143,314, and $115,783 respectively, for 1997, 1996
and 1995 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
$3,200, $1,833, and $1,500 in 1997, 1996 and 1995, respectively and
$2,780, $2,780, and $3,258 in disability insurance premiums for 1997,
1996, and 1995, respectively.

(3) The amounts listed represent contributions by the Corporation to the
named executives' accounts established under the Corporation's 401(k)
plan.

(4) Mr. Rose became employed by the Corporation on November 25, 1995.

12
<PAGE> 16

STOCK OPTION GRANTS

The following table shows information regarding grants of stock options
to each of the named executive officers during the year ended December 31, 1997.

OPTION GRANTS IN LAST FISCAL YEAR

POTENTIAL REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED ANNUAL RATES
------------------------------------------------------------ OF STOCK PRICE APPRECIATION
NUMBER OF PERCENT OF FOR OPTION TERM
SHARES TOTAL OPTIONS ------------------------------
UNDERLYING GRANTED TO EXERCISE EXPIRATION 5% 10%
OPTIONS EMPLOYEES PRICE DATE
NAME GRANTED IN FISCAL YEAR
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
David D. Gathman 2,500 0.5013 $13.25 1/23/07 $ 20,832.13 $52,792.72
Edward P. Kaiserian 2,000 0.4011 13.25 1/23/07 16,665.71 42,234.18
Jay M. Rose 2,000 0.4011 13.25 1/23/07 16,665.71 42,234.18
Victor E. Stambaugh 1,000 0.2005 10.75 1/23/07 6,646.30 16,778.24

</TABLE>

AGGREGATED OPTION EXERCISES IN 1997 AND YEAR-END OPTION VALUES

The following table sets forth information concerning options exercised
during 1997 and the number and the hypothetical value of certain unexercised
options of the Corporation held by the named executive officers as of December
31, 1997. This table is presented solely for purposes of complying with
Securities and Exchange 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.

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT FISCAL YEAR END FISCAL YEAR END
SHARES ACQUIRED VALUE ----------------------------- ----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
David D. Gathman 6,200 $ 50,642.97 59,776 58,024 $ 568,718.48 $ 512,331.00

Edward P. Kaiserian 0 0.00 5,400 12,800 54,009.93 101,958.93

Jay M. Rose 3,000 21,510.00 27,750 9,500 216,311.25 58,462.50

Victor E. Stambaugh 0 0.00 13,500 7,000 141,580.29 58,401.93
</TABLE>

13
<PAGE> 17

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 agreements for Mr. Gathman, Mr. Kaiserian,
Mr. Rose and Mr. Stambaugh provide for their employment for an indefinite period
at specified salaries, subject to the right of each 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.

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 1997,
or formerly, an officer or employee of the Corporation.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board of Directors is responsible for
a) approving the salary and other forms of remuneration of the chief executive
officer b) reviewing the compensation arrangements for other executive officers
and c) administering the Stock Option Plan. The Corporation's compensation
policies for executive officers are to (i) provide competitive compensation
packages in order to attract and retain superior executive talent, (ii) provide
short-term incentives by tying a portion of each executive's compensation to
financial results, and (iii) provide long-term incentives through equity
compensation (in the form of stock options), which further aligns the interests
of executive officers with the interests of shareholders. The principal
components of the Corporation's executive officer compensation program are base
salary, an annual cash incentive bonus, and incentive stock options. Short-term
incentive bonus awards are based solely on company performance whereas
long-term incentive awards are based largely on the personal performance and
contribution of the executive.

The Corporation's executive incentive bonus plan for 1997, which
included the chief executive officer, was based on targeted increases in
revenue and operating income, and was earned (up to a maximum amount) relative
to the actual achievement as a percentage of the targets. Based upon 1997
results, all executive officers, including the chief executive officer, earned
an aggregate of 75% of their maximum possible incentive bonuses.

The chief executive officer's base salary for 1997 remained at its
1996 level of $200,000. He earned an executive incentive bonus of $56,250 for
1997. The Compensation Committee approved this compensation package upon the
recommendation of the chief executive officer.

Donna J. Pedrick
Melvyn E. Bergstein

14
<PAGE> 18

STOCK PERFORMANCE GRAPH

The following graph compares the cumulative total shareholder 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,
1997 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.

[LINE CHART OMITTED]

Integrated Systems Industry NASDAQ
Date Consulting Group, Inc. Index Market Index
---- ---------------------- ----- ------------

<S> <C> <C> <C>
4/17/96 $100.00 $100.00 $102.34
9/30/96 $402.60 $94.87 $109.20
12/31/96 $275.00 $87.94 $107.16
3/31/97 $182.60 $74.90 $101.71
9/30/97 $227.60 $105.06 $140.29
12/31/97 $222.60 $103.51 $131.45

</TABLE>

15
<PAGE> 19

AMENDMENTS TO THE CORPORATION'S BY-LAWS

The Board of Directors of the Corporation has approved, and recommended
to the shareholders for approval, four amendments to the Corporation's By-laws.
The Board of Directors has determined that the adoption of each of these four
amendments is in the best interests of the Corporation. The proposed By-law
amendments are discussed below.

2. AMENDMENT TO SECTION 2.02(b) OF CORPORATION'S BY-LAWS

Under Section 2.02(b)(2) of the By-laws, as currently in effect, the
holders of 25% of the outstanding Common Stock may call a special meeting of the
shareholders. The Board of Directors has approved a proposal to amend the
By-laws by deleting this Section 2.02(b)(2). The effect of this amendment would
be that the shareholders of the Corporation would not be entitled to call a
special meeting of shareholders.

The purpose of this amendment is to commit to the Board of Directors
the authority to call special meetings of the shareholders. This is consistent
with Section 2521 of the Pennsylvania Business Corporation Law (the "BCL"),
which provides generally that shareholders of a corporation with shares
registered under the Securities Exchange Act of 1934 are not entitled by
statute to call special meetings of the shareholders. The Board of Directors
has concluded that Section 2.02(b)(2) of the By-laws presents and unduly low
threshold requirement for the calling of special meetings of shareholders. The
Board of Directors believes the policy reflected in Section 2521 of the BCL
represents more appropriate corporate governance for a publicly owned company.

If the shareholders approve this proposal, only the President of the
Corporation or a majority of the Board of Directors would be authorized to call
a special meeting of the shareholders. The inability on the part of the
shareholders to call special meetings of the shareholders could have an
anti-takeover effect by making more difficult or discouraging an attempt to
obtain control of the Corporation by means of a tender offer, proxy contest or
other means.

Currently, with the exception of the preferred stock provision,
described in the next sentence, the Corporation's Articles of Incorporation and
By-laws do not contain provisions having anti-takeover effects. The
Corporation's Articles of Incorporation give the Board of Directors the
authority, without the need for shareholder approval, to issue up to 500,000
shares of preferred stock, and to specify the terms thereof. All or a portion
of these shares may be issued by the Board of Directors when in its judgment
such action would be in the best interests of the shareholders and the
Corporation. Any issuance of such shares (or the mere existence of the
authorized shares without the actual issuance thereof) could have the effect of
discouraging unsolicited attempts to take over the Corporation. The Board of
Directors is not currently considering the issuance of any preferred stock.

In addition, the By-law amendment proposed in Proposal No. 3 below
could have an anti-takeover effect. See the discussion below. Proposals No. 2
and 3 herein are not part of a plan by management of the Corporation to adopt a
series of anti-takeover provisions. The Board of Directors is not aware of
present efforts by any person to accumulate the Corporation's securities or to
obtain control of the Corporation. The Board of Directors is proposing this
amendment to the By-laws at this time as part of an effort to improve and
streamline its corporate governance policies.

The affirmative vote at the Meeting, in person or by proxy, by the
holders of a majority of shares of Common Stock of the Corporation outstanding
on the Record Date, will be required for approval of this By-law amendment.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" APPROVAL OF THIS BY-LAW AMENDMENT. ALL SHARES REPRESENTED BY DULY RETURNED
PROXY CARDS WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY OTHERWISE ON THEIR
PROXY CARDS.

16
<PAGE> 20
3. AMENDMENT TO SECTION 9.01 OF CORPORATION'S BY-LAWS

Section 9.01 of the By-laws, as currently in effect, provides that the
Corporation's By-laws may be amended only upon majority vote of the
shareholders. Under this provision, the Board of Directors is not authorized to
amend the By-laws. The Board of Directors has adopted a proposal to amend
Section 9.01 of the By-laws to authorize the Board of Directors (as well as the
shareholders) to amend or repeal the By-laws and adopt new By-laws, except with
respect to matters committed by the BCL expressly to the shareholders. The
purpose of this amendment is to give the Board of Directors greater flexibility
in amending or repealing the By-laws. This would allow for such action without
the delay of submitting any By-law amendment or repeal (except one relating to
any matter committed to the shareholders by the BCL) to the shareholders for
approval and without the possible consequence of shareholder rejection of the
proposed amendment or repeal.

The Board of Directors is required to make any determination to amend
or repeal the By-laws based on its judgment as to the best interests of the
shareholders and the Corporation. If the shareholders approve this proposal, the
Board of Directors would be authorized to effect amendments or repeals of the
By-laws that could, depending on the terms of the amended By-laws or the new
By-laws, make more difficult or discourage an attempt to obtain control of the
Corporation by means of a merger, tender offer, proxy contest or other means.
When, in the judgment of the Board of Directors, the action will be in the best
interests of the stockholders and the Corporation, such amendment or repeal
could be used to create both procedural and other impediments, such as the
imposition of super majority voting provisions, nomination procedures and the
classification of directors to serve staggered terms, that may discourage
persons seeking to gain control of the Corporation. None of such amendments is
currently proposed, nor does the Board of Directors currently contemplate
implementing the same. The Board of Directors is not aware of present efforts
by any person to accumulate the Corporation's securities or to obtain control
of the Corporation. The Board of Directors is proposing this amendment to the
By-laws at this time as part of an effort to improve and streamline its
corporate governance policies. See Proposal No. 2 above for a discussion of the
potential anti-takeover effects of the By-law amendment proposed therein and of
the preferred stock provision in the Corporation's Articles of Incorporation.

17
<PAGE> 21
The Board of Directors believes that this amendment to the By-laws is
in the best interests of the Corporation and its shareholders. This amendment
will provide increased flexibility in meeting corporate needs that might arise.
The Board of Directors believes that the delay occasioned by seeking shareholder
approval of amendment or repeal of the By-laws in the future could be to the
detriment of the Corporation and its shareholders.

As amended, Section 9.01 of the By-laws would read as follows:

Section 9.01 Amendments. These By-laws may be amended or
repealed, or new By-laws may be adopted, either by the shareholders of
the Corporation at any duly organized meeting thereof or, with respect
to those matters that are not by the Statute committed expressly to the
shareholders and regardless of whether the shareholders have previously
adopted or approved the By-laws being amended or repealed, by the Board
of Directors of the Corporation.

4. AMENDMENT TO SECTION 2.06 OF CORPORATION'S BY-LAWS

Section 2.06 of the By-laws, as currently in effect, provides that in
order for shareholder action to be taken with respect to any matter, the votes
of at least a majority of the shares present at a meeting must be cast in favor
of the action. This provision creates a higher voting threshold than the general
rule provided by Section 1757(a) of the BCL. Under Section 1757(a) of the BCL,
whenever any corporate action is to be taken by vote of the shareholders, it
shall be authorized upon receiving the affirmative vote of a majority of the
votes cast thereon. The difference between the number of shares present at a
meeting and the number of votes cast on a given matter could be substantial,
with the latter likely to be a significantly smaller number. The Board of
Directors has approved a proposal to amend Section 2.06 of the By-laws to lower
the shareholder vote required for taking corporate action (with respect to
actions as to which a different vote level is not specifically required by
statute or otherwise) to a level consistent with Section 1757(a) of the BCL. The
purpose of this amendment is to lower the shareholder vote threshold, except as
to matters for which a different shareholder vote is otherwise specifically
required. For proposals not specifically subject to a more rigorous affirmative
vote requirement (by statute or otherwise) this is likely to make shareholder
approval easier to obtain. As amended, Section 2.06 of the By-laws would read
as follows:

Section 2.06 Voting. Except as otherwise provided in the
Statute or the articles of incorporation of the Corporation or these
By-laws, whenever any corporate action is to be taken by vote of the
shareholders of the Corporation, it shall be authorized by a majority
of the votes cast at a duly organized meeting of shareholders by the
holders of shares entitled to vote hereon.

18
<PAGE> 22
5. AMENDMENT TO SECTION 3.02 OF CORPORATION'S BY-LAWS

Section 3.02 of the By-laws, as currently in effect, provides that the
directors of the Corporation "shall be elected by the shareholders." As a
result, the manner of the vote required to elect directors under the By-laws is
determined by reference to Section 2.06 of the By-laws, which was discussed in
Proposal No. 3 above. Presently, in order to be duly elected, each director must
receive the affirmative vote of a majority of the shares present at a meeting.
The more typical voting formula, however, is to provide for the election of
directors by plurality vote. Under a plurality vote, those directors who receive
the most affirmative votes are elected regardless of whether any nominee
actually receives a majority vote. The Board of Directors has approved a
proposal to amend Section 3.02 of the By-laws to provide for election of the
directors by plurality vote. The purpose of this amendment is to standardize
and make less rigorous the shareholder vote required to elect directors of the
Corporation.

Section 3.02 of the By-laws, as currently in effect, also requires that
vacancies on the Board of Directors be filled by shareholder vote. As a result,
if any seat on the Board of Directors were to become vacant, it would remain
vacant until the next meeting of shareholders. It is more typical, however, for
board vacancies to be filled by a majority vote of the directors remaining on
the board. The Board of Directors has approved a proposal to amend Section 3.02
of the By-laws to provide that vacant seats on the Board of Directors be filled
by majority vote of the remaining directors. The purpose of this amendment is to
allow vacancies on the Board of Directors to be filled expeditiously without the
expense of a special meeting of shareholders or the delay of waiting for the
next annual shareholders meeting. As amended, Section 3.02 of the By-laws would
read as follows:

Section 3.02 Election of Directors; Vacancies.

(a) Except as otherwise provided in these By-laws, directors
of the Corporation shall be elected by the shareholders. The candidates
receiving the highest number of votes, up to the number of directors to
be elected, shall be elected.

(b) Vacancies. Vacancies in the board of directors, including
vacancies resulting from an increase in the number of directors, may be
filled by a majority vote of the remaining members of the board though
less than a quorum, or by a sole remaining director, and each person so
selected shall be a director to serve until a successor has been
selected and qualified or until his or her earlier death, resignation
or removal.

6. 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, 1998.
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 THAT 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.

<PAGE> 23

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 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, 1997, all filing requirements applicable to its officers, directors
and persons who own more than 10% of the Common Stock were complied with, except
for the following: (i) with respect to two transactions, a Form 5 was filed late
by Mr. Caldwell; and (ii) with respect to one transaction a Form 5 was filed
late by Mr. DeNino.

EXPECTED VOTE OF DIRECTORS AND OFFICERS

The Corporation expects that the directors and officers of the
Corporation, who are the beneficial owners of approximately 3,690,475 of the
outstanding Common Stock of the Corporation, will vote, or direct that their
shares be voted, in favor of the election of the directors nominated herein, in
favor of each of the four amendments to the Corporation's By-laws and in favor
of ratification of the appointment of the Corporation's independent public
accountants.

SHAREHOLDER PROPOSALS

Shareholders are entitled to submit proposals on matters appropriate
for shareholder action consistent with regulations of the Securities and
Exchange Commission. Should a shareholder intend to present a proposal at the
annual meeting for the year ending December 31, 1998, it must be received by the
Secretary of the Corporation (at 575 E. Swedesford Road, Wayne, Pennsylvania
19087) not later than Tuesday, December 22, 1998, and meet certain other
requirements of the rules of the Securities and Exchange Commission relating to
shareholders' proposals in order to be considered for inclusion in the
Corporation's Proxy Statement and form of proxy card relating to that 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,
1997, 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.

<PAGE> 24

MISCELLANEOUS

This solicitation is made on behalf of the Board of Directors of the
Corporation, and its cost (including preparing and mailing of the notice, this
Proxy Statement and the form of proxy card) will be paid by the Corporation. The
Corporation will also make arrangements with brokerage houses and other
custodians, nominees and fiduciaries to send the proxy materials to their
principals and will reimburse them for their reasonable expenses in so doing. To
the extent necessary in order to assure sufficient representation at the
Meeting, officers and regular employees of the Corporation may solicit the
return of proxies by mail, telephone, telegram and personal interview. No
compensation in addition to regular salary and benefits will be paid to any such
officer or regular employee for such solicitation. 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.

Where information contained in this Proxy Statement rests peculiarly
within the knowledge of a person other than the Corporation, the Corporation has
relied upon information furnished by such person.

By Order of the Board of Directors,

/s/ David D. Gathman
David D. Gathman
Secretary

Dated: April 20, 1998

21
<PAGE> 25

[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
8:00 A.M. (E.D.T.)
MAY 20, 1998

PLACE: THE PHILADELPHIA MARRIOTT WEST
111 CRAWFORD AVENUE
WEST CONSHOHOKEN, 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 27, 1998 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> 26

<TABLE>
<S> <C>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED Please mark
SHAREHOLDER. IF NO DIRECTIONS ARE GIVEN WITH RESPECT TO ANY OF SUCH ITEMS, THEN THE SHARES your votes as [x]
REPRESENTED BY THIS PROXY WILL BE VOTED FOR ITEMS 1 THROUGH 7 indicated in
this example

1. ELECTION OF ELEVEN DIRECTORS. NOMINEES: Frank Baldino, Jr., Melvyn E. 2. Proposal to amend the
Bergstein, Donald R. Caldwell, Mark J. Corporation's By-Laws by deleting
Denino, David D. Gathman, David S. Section 2.02 (b)(2) thereof, which
FOR all nominees WITHOLD Lipson, James L. Mann, Donna J. currently allows the holders of 25%
listed to the right AUTHORITY Pedrick, David Fehr, Michael D. Stern, of the Corporation's Common Stock to
(except as marked to vote for all Edward S.J. Tomezsko call special shareholder meetings.
to the contrary) nominees listed
to the right WITHHELD FOR: To withhold authority to FOR AGAINST ABSTAIN
[ ] [ ] vote for any individual nominee, write [ ] [ ] [ ]
his or her name in the space below
(this proxy will be voted for each 5. Proposal to amend the Section 9.01
3. Proposal to amend the Section 2.06 of nominee for whom authority to vote is of the Corporation's By-laws to
the Corporation's By-laws to reduce not withheld): authorize the Board of Directors to
the affirmative shareholder vote amend or repeal the By-laws and to
required for various corporate ----------------------------------------- adopt new By-laws.
actions to a majority of the votes 4. Proposal to amend the Section 3.02
cast at shareholders meetings. of the Corporation's By-laws to FOR AGAINST ABSTAIN
provide for the election of [ ] [ ] [ ]
FOR AGAINST ABSTAIN directors by plurality vote of the
[ ] [ ] [ ] shareholders and to allow vacancies 6. Proposal to ratify the appointment
on the Board of Directors to be of KPMG Peat Marwick LLP, as
- ------------------------------------------ filled by vote of the remaining independent auditors.
directors
FOR AGAINST ABSTAIN
FOR AGAINST ABSTAIN [ ] [ ] [ ]
[ ] [ ] [ ]
7. In their discretion, the Proxies are
authorized to vote upon such other
business as may properly come before
the meeting and any adjournment(s)
thereof.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

SIGNATURE______________________________________ SIGNATURE_____________________________________ DATE _____________
</TABLE>

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.

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