<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material under Rule 14a-12
MARCHFIRST, INC.
-----------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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</TABLE>
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[LOGO]
MARCHFIRST, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 24, 2000
To the Stockholders of
marchFIRST, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
marchFIRST, Inc. will be held at The Institute for Strategic Education, 320
North Elizabeth Street, Chicago, Illinois 60607, on Wednesday, May 24, 2000 at
10:00 a.m., central time. A proxy and a proxy statement for the Annual Meeting
are enclosed.
The Annual Meeting is being held for the following purposes:
(1) To elect two directors of the first class to the Company's Board of
Directors;
(2) To approve the marchFIRST, Inc. Amended and Restated Employee Stock
Purchase Plan; and
(3) To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on April 13, 2000 as
the record date for determining stockholders entitled to notice of, and to vote,
at the Annual Meeting or any adjournments thereof.
Information concerning the matters to be acted upon at the Annual Meeting is
set forth in the accompanying proxy statement.
By Order of the Board of Directors,
/s/ Edward V. Szofer
Edward V. Szofer
SECRETARY
Chicago, Illinois
April 28, 2000
ALL STOCKHOLDERS ARE URGED TO ATTEND THE MEETING IN PERSON OR BY PROXY.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE
COMPLETE, DATE, SIGN AND RETURN THE PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE FURNISHED FOR THAT PURPOSE. YOUR PROXY
CAN BE WITHDRAWN AT ANY TIME BEFORE IT IS VOTED.
<PAGE>
[LOGO]
MARCHFIRST, INC.
311 South Wacker Drive
Suite 3500
Chicago, Illinois 60606-6618
(312) 922-9200
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 24, 2000
The accompanying proxy is solicited by the Board of Directors of
marchFIRST, Inc. (the "Company") for use at the Company's Annual Meeting of
Stockholders to be held at 10:00 a.m., central time, Wednesday, May 24, 2000, at
The Institute for Strategic Education, 320 North Elizabeth Street, Chicago,
Illinois 60607, and any adjournments thereof. This proxy statement and the
accompanying form of proxy are initially being mailed to stockholders on or
about April 28, 2000.
RECORD DATE AND OUTSTANDING SHARES
The Board of Directors has fixed the close of business on April 13, 2000 as
the record date for the determination of stockholders entitled to notice of, and
to vote at, the Annual Meeting or any adjournments thereof. As of the record
date, the Company had outstanding 146,348,802 shares of Common Stock, par value
$.001 per share. Each of the outstanding shares of its Common Stock is entitled
to one vote on all matters coming before the Annual Meeting.
VOTING OF PROXIES
Robert F. Bernard and Edward V. Szofer, the persons named as proxies on the
proxy card accompanying this proxy statement, were selected by the Board of
Directors of the Company to serve in such capacity. Messrs. Bernard and Szofer
each serve as an executive officer and director of the Company. The shares
represented by each executed and returned proxy will be voted in accordance with
the directions indicated thereon or, if no direction is indicated, in accordance
with the recommendations of the Board of Directors contained in this proxy
statement. The Board of Directors does not presently intend to bring any
business before the Annual Meeting other than the specific proposals referred to
in this proxy statement and specified in the notice of Annual Meeting, and so
far as is known to the Board of Directors, no other matters are to be brought
before the Annual Meeting. As to any other business that may properly come
before the Annual Meeting, however, it is intended that proxies, in the form
enclosed, will be voted in respect thereof in accordance with the judgment of
the persons voting such proxies.
QUORUM
The required quorum for the transaction of business at the Annual Meeting
will be a majority of the outstanding shares of Common Stock entitled to vote on
the record date. Broker non-votes are included for purposes of determining
whether a quorum is present at the Annual Meeting. A broker non-vote occurs when
a nominee holding shares for a beneficial owner does not vote on a particular
proposal because the nominee does not have discretionary voting power with
respect to that item and has not received instructions from the beneficial
owner.
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REQUIRED VOTE
A plurality of the votes of the shares present in person or represented by
proxy at the Annual Meeting is required to elect the nominees for director.
Stockholders will not be allowed to cumulate their votes in the election of
directors. Broker non-votes will have no effect in the election of directors. A
majority of the votes of shares present in person or represented by proxy is
required to approve the marchFIRST, Inc. Amended and Restated Employee Stock
Purchase Plan. Abstentions will have the same effect as votes against this
proposal. Broker non-votes will have no effect on the voting of this proposal.
ANNUAL REPORT TO STOCKHOLDERS
The Company's Annual Report to Stockholders for the year ended December 31,
1999, containing financial and other information pertaining to the Company, is
being furnished to stockholders simultaneously with this proxy statement.
PROPOSAL I
ELECTION OF DIRECTORS
The Company's Board of Directors consists of eight directors. Article III of
the Company's Second Amended and Restated Bylaws provides that the members of
the Board of Directors shall be classified with respect to the terms for which
its members shall hold office by dividing the members into three classes. At the
Annual Meeting, two directors of the first class of the Company's Board of
Directors will be elected for a term of three years expiring at the Annual
Meeting of Stockholders in 2003. The nominees are presently serving as directors
of the Company. See "--Nominees for Election as Directors" below.
The six directors whose terms of office do not expire in 2000 will continue
to serve after the Annual Meeting until such time as their respective terms of
office expire or their successors are duly elected and qualified. See "--Other
Directors" below.
If at the time of the Annual Meeting either of the nominees should be unable
or decline to serve, the persons named in the proxy will vote for such
substitute nominee(s) as the Board of Directors recommends, or vote to allow the
vacancy or vacancies created thereby to remain open until filled by the Board,
as the Board recommends. The Board of Directors has no reason to believe that
either of the nominees will be unable or will decline to serve as a director if
elected.
NOMINEES FOR ELECTION AS DIRECTORS
The names of the nominees for the office of director, together with certain
information concerning such nominees, is set forth below:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY DIRECTOR SINCE
- ---- -------- ------------------------- --------------
<S> <C> <C> <C>
Mark D. Kvamme (1)................................... 40 Director 2000
Joseph Marengi (2)................................... 46 Director 2000
</TABLE>
- ------------------------
(1) Member of Nominating Committee.
(2) Member of Audit Committee.
MARK D. KVAMME has served as a director of the Company since March 2000.
From December 1998 to February 2000, Mr. Kvamme served as Chairman of the Board
of USWeb Corporation ("USWeb"), a professional services firm which was acquired
by the Company in March 2000. In 1989, Mr. Kvamme became a partner in CKS Group,
Inc. ("CKS Group") and from 1991 until December 1998 served as the Chairman of
its Board of Directors and Chief Executive Officer. USWeb acquired CKS Group in
November 1998 (CKS Group, and the merged entity are each sometimes referred to
in this proxy
2
<PAGE>
statement as "USWeb/CKS"). Prior to joining CKS Group, Mr. Kvamme held
management and marketing positions at Wyse Technology, a terminal and personal
computer manufacturer, International Solutions, Inc., a computer products
distributor, and Apple Computer, Inc., a personal computer manufacturer.
Mr. Kvamme also serves as a director of Macromedia, Inc.
JOSEPH MARENGI has served as a director of the Company since March 2000.
From August 1998 to February 2000, Mr. Marengi served as a director of
USWeb/CKS. Since July 1997, Mr. Marengi has served as Senior Vice President and
Group General Manager for Dell Computer Corporation, a personal computer
manufacturer. Prior to joining Dell, Mr. Marengi served as President and Chief
Operating Officer of Novell, Inc., a network software company ("Novell"). He
joined Novell in 1989 through its acquisition of Excelan.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE NOMINEES
FOR ELECTION AS DIRECTORS OF THE FIRST CLASS.
OTHER DIRECTORS
The following persons will continue as directors of the Company after the
Annual Meeting until their terms of office expire, as indicated below, or until
their successors are elected and qualified.
<TABLE>
<CAPTION>
SERVED AS
NAME AGE POSITION(S) WITH COMPANY DIRECTOR SINCE TERM EXPIRES
- ---- -------- ------------------------------ -------------- ------------
<S> <C> <C> <C> <C>
Robert F. Bernard............. 38 Chairman of the Board, Chief 1984 2002
Executive Officer and
President
Paul D. Carbery (1) (2)....... 39 Director 1995 2001
W. Barry Moore (2) (3)........ 59 Director 1999 2002
David P. Storch (3)........... 47 Director 1999 2001
Edward V. Szofer.............. 40 Director, Chief Development 1995 2001
Officer and Secretary
John R. Torell, III (1) (3)... 60 Director 2000 2002
</TABLE>
- ------------------------
(1) Member of Nominating Committee.
(2) Member of Audit Committee.
(3) Member of Compensation Committee.
ROBERT F. BERNARD, the founder of the Company, has served as Chief Executive
Officer of the Company since its inception in 1984. From the Company's inception
until its merger with USWeb/CKS in March 2000, Mr. Bernard served as the
Company's Chairman of the Board. Mr. Bernard resumed his role as Chairman of the
Board in late March 2000. From 1984 to August 1997, Mr. Bernard also served as
the Company's President. Mr. Bernard resumed his role as President in
March 2000. Mr. Bernard serves as Chairman of the education subcommittee of the
Chicago Mayor's Council of Technology Advisors and is a director of Web
Street, Inc. and divine interVentures, inc.
PAUL D. CARBERY has served as a director of the Company since August 1995.
Mr. Carbery has been a general partner of Frontenac Company, a private equity
investment management partnership, since June 1993 and was an associate of that
firm from September 1989 to June 1993. He also serves as a director of Lante
Corporation.
W. BARRY MOORE has served as a director of the Company since July 1999.
Mr. Moore has been Vice Chairman of Kurt Salmon Associates, a leading global
management-consulting firm serving the retail, consumer products and health care
industries, since 1999 and has served as President for the North American and
Asian practices of that firm since 1990. Prior to joining Kurt Salmon
Associates, he was the Chief Operating Officer of Cable Atlanta, a media
services provider. Prior to that time, Mr. Moore was a
3
<PAGE>
partner with Touche Ross Management Consulting, responsible for the Southeast
and Middle Atlantic regions of the United States.
DAVID P. STORCH has served as a director of the Company since July 1999.
Mr. Storch has been Chief Executive Officer of AAR Corp., a New York Stock
Exchange listed aviation aftermarket support company, since October 1996 and has
served as its President and Chief Operating Officer since 1989. Mr. Storch has
also served as a director of AAR Corp. since 1989.
EDWARD V. SZOFER has served as a director of the Company since August 1995
and has been its Secretary since May 1996 and its Chief Development Officer
since March 2000. From August 1997 to March 2000, Mr. Szofer served as President
of the Company. From December 1993 through July 1997, Mr. Szofer served as Vice
President of the Company. From 1984 to December 1993, Mr. Szofer held various
management positions with the Company in operations. Mr. Szofer was employed as
a consultant of Arthur Andersen LLP prior to joining the Company.
JOHN R. TORELL, III has served as a director of the Company since
March 2000. Mr. Torell has been the Chairman of Torell Management Inc., a
private investment company since 1990. From February 1999 to September 1999, he
served as a financial advisor at Mitchell Madison Group, a strategy consulting
firm focused on business-to-business commerce. From 1990 to 1994, Mr. Torell
served as Chairman and Chief Executive Officer of Fortune Bancorp, a savings and
loan institution. Mr. Torell is also a director of American Home Products Corp.,
Heartland Technologies Inc., Volt Information Sciences Inc. and PaineWebber
Group, Inc.
MEETINGS
During the year ended December 31, 1999, the Board of Directors held seven
meetings. During 1999, each person who served as director in that year attended
at least 75% of the aggregate total number of meetings of the Board of Directors
during the period for which he was a director and the total number of meetings
held by all committees of the Board of Directors on which he served.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has established an audit committee, compensation
committee and nominating committee. Each of the audit committee, compensation
committee and nominating committee currently consists entirely of directors who
are not officers or employees of the Company.
The audit committee, consisting of Messrs. Carbery, Marengi and Moore, is
responsible for selection, reviewing the results and scope of audits and other
services provided by the Company's independent auditors and reviewing the
Company's audit and control functions and reporting to the full Board of
Directors regarding all of the foregoing. The audit committee held two meetings
during 1999.
The compensation committee, consisting of Messrs. Moore, Torell and Storch,
makes recommendations concerning salaries and incentive compensation for the
employees of the Company, including the number of options to be granted to the
Company's executive officers pursuant to its incentive compensation plans, and
reporting to the full Board of Directors regarding the foregoing. The
compensation committee held two meetings in 1999.
The nominating committee, consisting of Messrs. Carbery, Kvamme and Torell,
considers and recommends nominees for election to serve on the Company's Board
of Directors. The nominating committee will not consider nominees recommended by
stockholders. However, stockholders may nominate persons for election to the
Board of Directors by following the procedure set forth in the Company's
by-laws. The nominating committee was established in July 1999 and did not hold
any meetings in 1999.
4
<PAGE>
DIRECTOR COMPENSATION
Members of the Board of Directors receive no cash compensation for their
services as directors. Directors are reimbursed for their reasonable
out-of-pocket expenses incurred in attending meetings.
Non-employee directors participate in the Company's 1995 Incentive Stock
Plan. The Company awards stock options to non-employee directors to further
align director and stockholder interests, reflect industry practices and assist
in attracting and retaining capable directors. In 1999, Paul D. Carbery received
an option grant for 10,000 shares, vesting in equal increments over the two
years remaining in his current term. Following their election at the Annual
Meeting, Joseph Marengi and Mark D. Kvamme will each receive an option grant for
15,000 shares, vesting in equal increments over the three years of their new
terms. Also, at that time, John R. Torrell, III will receive an option grant for
10,000 shares, vesting in equal increments over the two years remaining in his
current term. The exercise price of each of these options equals, or will equal,
the fair market value of the Company's Common Stock on the date of grant. These
options will expire on the tenth anniversary of the date of the option grant.
EXECUTIVE OFFICERS
Set forth below is a table identifying executive officers of the Company who
are not identified in the tables entitled "Election of Directors--Nominees for
Election as Directors" and "Election of Directors--Other Directors," above.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- -------- ------------------------------------------
<S> <C> <C>
Robert T. Clarkson........................ 47 Chief Operating Officer
Bert B. Young............................. 46 Chief Financial Officer and Treasurer
</TABLE>
ROBERT T. CLARKSON was named Chief Operating Officer of the Company in
March 2000. From November 1999 until March 2000, he served as Chief Operating
Officer of USWeb/CKS. Mr. Clarkson became the executive partner of the
pan-European Region of USWeb/CKS upon consummation of the USWeb-CKS merger in
December 1998 and later served as the executive partner of the Northwest Region.
From February 1997 to December 1998, Mr. Clarkson served as Executive Vice
President of CKS Group. Prior to joining CKS Group, Mr. Clarkson was a partner
with the law firm of Wilson Sonsini Goodrich & Rosati.
BERT B. YOUNG has served as the Chief Financial Officer and Treasurer of the
Company since August 1999. Mr. Young joined the Company in 1997 as the Chief
Information Officer before becoming the Chief Financial Officer and Treasurer.
Mr. Young was previously the Vice President of Information Systems and Chief
Information Officer at Waste Management, Inc., where he was responsible for a
300 person systems organization with a $70 million annual budget. He developed
and implemented an international systems strategy while at that firm. Prior to
joining Waste Management, Inc., Mr. Young was the Chief Financial Officer of a
start-up regional airline.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
executive officers, directors and persons who beneficially own more than 10% of
a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
These reporting persons are required by Securities and Exchange Commission
regulations to furnish the Company with copies of all Section 16 forms they
file. The Company notes that, during 1999 Mr. Bernard inadvertently filed one
untimely report with respect to one transaction. The Company believes that all
other Section 16 filing requirements applicable to its reporting persons were
complied with by such persons.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table provides information concerning the annual and long-term
compensation for services in all capacities to the Company for the last three
fiscal years of those persons who were at December 31, 1999 (a) the Chief
Executive Officer and (b) the three other executive officers of the Company. The
table also provides information concerning compensation for two additional
individuals whose employment with the Company terminated in 1999 but who would
have been among the Company's most highly compensated executive officers if they
had been serving as executive officers at December 31, 1999 (collectively, with
the Chief Executive Officer and the three other executive officers of the
Company at December 31, 1999, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
--------------------------
AWARDS
--------------------------
RESTRICTED SECURITIES
ANNUAL COMPENSATION STOCK UNDERLYING
---------------------- AWARDS OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) (1) (#) COMPENSATION #
- --------------------------- -------- ---------- --------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Robert F. Bernard........................ 1999 $ -- $ -- $ -- 200,000 $342,149(3)
Chairman of the Board and 1998 130,152 -- -- 102,000 --
Chief Executive Officer (2) 1997 360,000 10,368 -- 76,166 --
Edward V. Szofer......................... 1999 $290,385 $ -- $ -- 27,708 $109,914(4)
President and Secretary (2) 1998 242,789 -- -- 82,000 1,200
1997 218,750 6,480 -- 45,316 1,200
Bert B. Young............................ 1999 $236,250 $ -- $ -- 42,166 $ 70,285(5)
Chief Financial Officer and 1998 186,923 -- -- 73,000 1,200
Treasurer (2) 1997 76,692 -- -- 38,462 --
Michael J. Berent........................ 1999 $340,385 $ -- $ -- 78,823 $ 66,188(7)
Chief Operating Officer (2)(6) 1998 305,769 4,500 36,000 --
1997 17,307 -- 610,500(8) 110,000 --
Kevin M. Gaskey.......................... 1999 $178,461 $ -- $ -- 67,708 $ 2,000(10)
Chief Financial Officer and 1998 235,577 -- -- 82,000 1,200
Treasurer (9) 1997 191,250 5,760 -- 30,290 1,200
Stanley F. Martin........................ 1999 $139,615 $ -- $ -- 27,708 $ 62,881(12)
Executive Vice President, 1998 242,308 -- -- 113,300 1,200
Strategic Services (11) 1997 189,327 33,069(13) -- 85,510 --
</TABLE>
- ------------------------------
(1) The Company did not issue any restricted stock or grant any stock
appreciation rights to the Named Executive Officers in 1999 and 1998. None
of the Named Executive Officers, other than Michael Berent, held restricted
stock as of December 31, 1999.
(2) As of December 31, 1999.
(3) Represents the dollar value of the benefit to Mr. Bernard of premiums paid
by the Company for split-dollar life insurance.
(4) Includes $2,000 in Company matching contributions pursuant to the Company's
401(k) plan, and $107,914 representing the dollar value of the benefit to
Mr. Szofer of premiums paid by the Company for split-dollar life insurance.
(5) Includes $2,000 in Company matching contributions pursuant to the Company's
401(k) plan, and $68,285 representing the dollar value of the benefit to
Mr. Young of premiums paid by the Company for split-dollar life insurance.
(6) From December 1998 to June 1999, Mr. Berent served as Executive Vice
President, North American Operations of the Company. From June 1999 to
March 2000, he served as Chief Operating Officer of the Company. Since
March 1, 2000, Mr. Berent has served as Chief Combination Officer and is no
longer deemed to be an executive officer of the Company.
(7) Represents the dollar value of the benefit to Mr. Berent of premiums paid
by the Company for split-dollar life insurance.
(8) The Company awarded Michael J. Berent 44,000 restricted shares on
October 28, 1997. The value of the award is based on the closing price per
share of the Common Stock on October 28, 1997, which was $13.875. As of
December 31, 1999, 27,500 shares under the award were vested. The remainder
of the award vests on varying dates and in varying amounts as follows:
5,445 shares on February 29, 2000; 3,648 shares on September 1, 2000; 1,389
shares on October 28, 2000 and 6,018 shares on March 1, 2001. Mr. Berent
continues to hold 24,000 of the restricted shares, which had a value of
$1,287,120 on December 31, 1999. This value is based on the closing price
per share of the Common Stock on December 31, 1999, which was $53.63.
Mr. Berent will be entitled to all dividends declared on the Common Stock
with respect to this award.
(9) Mr. Gaskey's employment with the Company terminated in August 1999.
(10) Represents Company matching payments under the Company's 401(k) plan.
(11) Mr. Martin's employment with the Company terminated in July 1999.
(12) Includes $2,000 in Company matching contributions pursuant to the
Company's 401(k) plan and $60,881 which represents a severance payment.
(13) Represents a relocation payment of $27,789 and a cash bonus of $5,280 paid
in accordance with the Company's incentive policies.
6
<PAGE>
OPTION GRANTS IN 1999
The following table provides certain information with respect to the grant
of stock options by the Company to the Named Executive Officers during 1999. No
stock appreciation rights were granted to the Named Executive Officers by the
Company in 1999.
OPTION GRANTS IN 1999
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1)
------------------------------------------------- POTENTIAL REALIZABLE VALUE
NUMBER OF AT ASSUMED
SECURITIES % OF TOTAL ANNUAL RATES OF STOCK
UNDERLYING OPTIONS PRICE APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OPTION TERM(2)
GRANTED EMPLOYEES IN PRICE EXPIRATION ---------------------------
NAME (#) 1999 ($/SH.) DATE 5%($) 10%($)
- ---- ---------- ------------ -------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Robert F. Bernard.............. 40,000 0.49% 27.63 1/4/09 694,929 1,761,085
40,000 0.49% 26.34 1/14/09 662,805 1,679,677
40,000 0.44% 23.00 3/31/09 578,583 1,466,243
40,000 0.49% 30.31 7/1/09 762,472 1,932,253
40,000 0.49% 37.31 10/1/09 938,562 2,378,501
Edward V. Szofer............... 27,708 0.34% 26.34 1/14/09 459,051 1,163,327
Bert B. Young.................. 22,166 0.27% 26.34 1/14/09 367,294 930,793
20,000 0.25% 23.69 7/26/09 297,970 755,115
Michael J. Berent.............. 78,823 0.97% 26.34 1/14/09 1,306,107 3,309,849
Kevin M. Gaskey................ 67,708 0.83% 26.34 1/14/09 1,121,856 2,843,004
Stanley F. Martin.............. 27,708 0.34% 26.34 1/14/09 459,051 1,163,327
</TABLE>
- ------------------------
(1) These options have varying vesting dates ranging from January 1999 to
October 2003. The exercise price is payable by check, by cashless exercise
or, subject to certain limitations, by delivery of shares of Common Stock.
(2) Potential realizable value is presented net of the option exercise price
but before any federal or state income taxes associated with exercise.
These amounts represent certain assumed rates of appreciation only. Actual
gains are dependent on the future performance of the Common Stock and the
option holder's continued employment throughout the vesting period. The
potential realizable value does not represent the Company's prediction of
its stock price performance. The amounts reflected in the table may not be
achieved.
7
<PAGE>
AGGREGATED OPTION EXERCISES IN 1999 AND YEAR-END 1999 OPTION VALUE
The following table sets forth certain information with respect to option
exercises in 1999, by the Named Executive Officers and Named Executive Officers'
unexercised options at December 31, 1999. None of the Named Executive Officers
held any stock appreciation rights at December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED IN-THE-
SHARES UNEXERCISED OPTIONS AT MONEY OPTIONS AT YEAR-END
ACQUIRED YEAR END 1999 1999($)(1)
ON VALUE REALIZED --------------------------- -----------------------------
NAME EXERCISE (#) ($)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------ -------------- ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert F. Bernard........ -- $ -- 131,913 246,253 $ 4,582,054 $7,107,755
Edward V. Szofer......... -- -- 257,747 80,393 12,309,880 2,781,249
Michael J. Berent........ 20,954 270,543 38,000 123,869 1,434,500 4,100,942
Bert B. Young............ 20,000 330,625 45,164 88,464 1,538,451 2,965,656
Kevin M. Gaskey.......... 166,754 3,391,345 0 0 -- --
Stanley F. Martin........ 82,241 1,029,933 0 0 -- --
</TABLE>
- ------------------------
(1) The value per option is calculated by subtracting the exercise price from
the closing price of the Common Stock on the Nasdaq National Market on
December 31, 1999, which was $53.63.
(2) The value is calculated by subtracting the exercise price per share from
the fair market value at the time of exercise and multiplying by the number
of shares exercised pursuant to the option.
EMPLOYMENT AGREEMENTS
The Company is a party to substantially similar employment contracts with
Messrs. Bernard and Szofer pursuant to which each of those individuals serves as
an executive of the Company at compensation levels and terms to be agreed upon
between those individuals and the Company. The agreements with Messrs. Bernard
and Szofer provide that, upon termination of employment by the Company, other
than for "cause," as defined in the agreements, or retirement, the Company shall
pay the officer in equal semi-monthly installments over two years an amount
equal to twice the executive's annual base compensation in effect at the time of
termination. The agreement with Mr. Szofer also provides that, in the event of a
"change in control" as defined in the agreements and the occurrence of certain
events, and to the extent deductible under then applicable tax laws, the Company
shall pay Mr. Szofer an amount equal to two times the sum of: (a) his most
recent base annual compensation in effect at the date of the "change in
control," and (b) the cash value of purchasing on an individual basis insurance
protection, including dependent coverage, that is equal to the coverage then in
effect with respect to the Company's health insurance plan, based upon the cost
of such insurance coverage for a six-month period following the "change in
control" date, payable in equal semi-monthly installments over two years.
Mr. Bernard's employment agreement does not provide for payments in the event of
a "change in control." Each of Messrs. Bernard and Szofer is subject to
noncompetitive, nonsolicitation and nondisclosure covenants under his employment
agreement.
The Company has also entered into similar letter agreements with
Messrs. Szofer and Young regarding their continued employment with the Company
following the merger with USWeb/CKS. The letter agreements provide that upon
termination of employment by the Company other than for cause or upon the
occurrence of certain constructive termination events, 50% of all then-unvested
options that were subject to acceleration as provided in a 2000 amendment to the
non-qualified stock options of Messrs. Szofer and Young shall become immediately
exercisable. In addition, upon termination of Mr. Szofer's employment by the
Company other than for cause or upon the occurrence of certain constructive
termination events, 100% of all then-unvested options subject to the 1999
amendment to Mr. Szofer's non-qualified stock options shall become immediately
exercisable. Mr. Young will receive severance pay equal to six month's base
salary at the rate in effect at the time of the termination.
8
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation committee of the Board of Directors, which consists
entirely of non-employee directors, establishes the Company's compensation
strategy and policies and determines the nature and amount of all compensation
for the Company's executive officers.
The compensation committee recognizes that the Company's many achievements
to date have been largely a result of the outstanding efforts of the Company's
senior management team and that the Company's future success will depend
substantially on its continued ability to attract, motivate and retain talented
and dedicated senior executives. With this understanding, the compensation
committee attempts to:
- reward executives for superior individual and Company performance,
- foster commitment to the annual and long-term business performance and
growth of the Company,
- align the interests of the management team and the Company's stockholders,
and
- provide executive compensation packages that are fair and competitive with
those provided by the Company's competitors in the e-Business professional
services industry.
To accomplish these goals, the compensation committee offers executive
compensation packages consisting of three primary components:
- base salaries,
- annual cash incentive awards based upon achievement of pre-determined
financial targets for the Company, as well as key individual contributions
to the Company's strategic development, and
- stock option awards, which enable the executives to profit only as
stockholder value increases.
In making its compensation decisions, the compensation committee considers
overall Company financial performance, as well as individual executive
contributions, as measured against certain objective and subjective factors,
which the compensation committee considers important. The compensation committee
also reviews compensation surveys prepared by industry sources and, in greater
detail, compensation information with respect to publicly-traded companies in
the e-Business professional services industry. These companies, which the
Company considers its principal competitors for executive talent, are included
in the Nasdaq Computer & Data Processing Services Index appearing in the
performance graph in this proxy statement. Although the compensation committee
does not target each item of compensation at a particular level relative to
these comparative companies, the compensation committee does offer its
executives the opportunity to earn highly competitive total compensation
packages, provided the Company achieves certain financial targets and individual
executive performance meets expectations.
BASE SALARIES
Base salaries are established in consideration of the competitive
marketplace, at levels which the compensation committee considers to be
appropriate relative to the responsibilities, experience and individual
performance of each executive officer, without assigning any specific weight to
any factor. Although the financial performance of the Company is also taken into
account in setting base salaries, cash incentive awards and stock options are
the primary components of the executive compensation packages designed to link
compensation to Company performance. Base salaries are generally subject to
annual review for adjustment by the compensation committee. For 1999, the
compensation committee decided to increase executive officers' base salaries
based on a review of competitive practices and the growth of the Company.
However, Mr. Bernard, the Company's Chairman and Chief Executive Officer, has
entered into a special pay arrangement which is discussed further below. SEE
"Chief Executive Officer Compensation."
9
<PAGE>
INCENTIVE AWARDS
Annual cash incentive awards are based upon achievement of pre-determined
financial targets for the Company, as well as key individual contributions to
the Company's strategic development. For 1999, the Company's executive officers
did not earn any cash incentive awards based on results versus targets. See
"Chief Executive Officer Compensation" below for information on the Chief
Executive Officer.
In keeping with the Company's philosophy of aligning executive and
stockholder interests, executives are generally given the opportunity to elect
to receive stock options in lieu of the cash compensation earned under the
annual incentive plan, which many executives have done in previous years. By
foregoing cash incentives for stock options, the variable "at risk" component of
the executive's compensation package increases, further motivating executives to
increase stockholder value over the long term and demonstrating their confidence
in the future success of the Company. Under the program, the amount of the stock
option granted in lieu of cash compensation is typically determined by the
compensation committee based on consideration of a number of factors, including
a present value estimate of stock option value, the degree of risk incurred by
the executive and the positive economic impact to the Company of participation
in the program. Because the Company's executive officers did not earn any cash
incentive awards for 1999, they did not have the opportunity to receive stock
options in lieu of such awards.
STOCK OPTIONS
Stock option awards generally comprise the largest portion of the value of
an executive's total compensation package and serve as the cornerstone of the
Company's executive compensation program. The compensation committee believes
that stock options align executive interests with those of stockholders,
encourage retention of experienced personnel and create appropriate incentives
to maximize stockholder value. The compensation committee generally makes annual
stock option awards to the executive officers, depending upon the Company's
financial performance for the previous year. Other factors in developing award
levels include individual performance and industry practices. Stock options
generally have exercise prices of no less than the fair market value of the
Common Stock on the date of grant. Vesting schedules are used to encourage
continued employment with the Company and to emphasize long-term performance.
CHIEF EXECUTIVE OFFICER COMPENSATION
In 1998, the compensation committee, with the aid of an independent
executive compensation consulting firm, recommended to the Board of Directors a
reconfiguration of the compensation structure for the Chief Executive Officer.
The reconfiguration further emphasized the Board of Directors' belief that the
role of the chief executive is to create stockholder value.
Under this program, effective with respect to 1999 compensation, salary and
cash bonuses were eliminated, leaving stock options and their associated gains
as the sole source of compensation. Without any base salary or bonus paid in
cash, the Chief Executive Officer's compensation has been entirely dependent on
the creation of incremental market value through setting strategic direction and
achieving targeted financial performance. For 1999, Mr. Bernard, the present
Chief Executive Officer consented to be employed under the structure and the
Board of Directors approved its implementation. In March 2000, Mr. Bernard
resumed his role as President of the Company. Although stock options will
continue to be a primary component of compensation, as a result of his expanded
duties as President, it is expected that Mr. Bernard will receive a salary
during 2000.
During 1999, options to purchase an aggregate of 200,000 shares of Common
Stock were granted to the Chief Executive Officer under this compensation
structure. The compensation committee and the Board of Directors believe that
this structure will help insure a focus by the Chief Executive Officer on the
strategic and financial results that build stockholder value.
10
<PAGE>
COMPLIANCE WITH SECTION 162(m)
The compensation committee currently intends for all compensation paid to
its executive officers to be tax deductible to the Company pursuant to
Section 162(m) of the Internal Revenue Code. Section 162(m) provides that
compensation paid to the executive officers in excess of $1,000,000 cannot be
deducted by the Company for federal income tax purposes unless, in general, such
compensation is performance-based, is established by a committee of independent
directors and is objective, and the plan or agreement providing for such
performance-based compensation has been approved in advance by stockholders. The
compensation committee believes that the requirements of Section 162(m) may
arbitrarily impact the Company. Accordingly, in the future, the compensation
committee may determine to adopt a compensation program that does not satisfy
the conditions of Section 162(m) if in its judgment, after considering the
additional costs of not satisfying Section 162(m), such program is appropriate.
COMPENSATION COMMITTEE
<TABLE>
<CAPTION>
DURING THE YEAR ENDED DECEMBER 31, 1999: SINCE MARCH 1, 2000:
<S> <C>
W. Barry Moore W. Barry Moore
Lawrence P. Roches John R. Torell, III
David P. Storch David P. Storch
</TABLE>
11
<PAGE>
PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total returns for the
Company, the Nasdaq Stock Market-U.S. Index and the Nasdaq Computer & Data
Processing Services Index during the period commencing on May 3, 1996, the date
of the Company's initial public offering, and ending on December 31, 1999. The
comparison assumes $100 was invested on May 3, 1996 in the Common Stock, the
Nasdaq Stock Market-U.S. Index and the Nasdaq Inc. Computer & Data Processing
Services Index and assumes the reinvestment of all dividends, if any.
Note: The Common Stock performance shown below is not necessarily indicative
of future price performance.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NASDAQ COMPUTER &
<S> <C> <C> <C>
Nasdaq Stock Data Processing
marchFIRST, Inc. Market - U.S. Index Services Index
5/3/96 $100.00 100.00 100.00
12/31/96 $209.18 109.04 107.22
12/31/97 $279.59 133.87 131.68
12/31/98 $451.10 188.18 236.10
12/31/99 $875.15 340.10 497.14
</TABLE>
12
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
Except as otherwise indicated, the following table sets forth, as of
March 31, 2000, certain information with respect to the beneficial ownership of
the Company's Common Stock by (i) each person known by the Company to own
beneficially more than 5% of the outstanding shares of the Common Stock,
(ii) each of the Named Executive Officers, (iii) each director of the Company,
and (iv) all executive officers and directors of the Company as a group. Unless
otherwise indicated, each person named below has (a) an address in care of the
Company's principal executive offices, and (b) to the Company's knowledge, sole
voting and investment power with respect to all shares of Common Stock shown as
beneficially owned by such person.
<TABLE>
<CAPTION>
PERCENTAGE
NAME TOTAL OF OWNERSHIP
- ---- ---------- -------------
<S> <C> <C>
Robert F. Bernard (1)....................................... 12,832,535 8.8%
Paul D. Carbery (1)......................................... 5,000 *
Robert T. Clarkson (1)...................................... 254,858 *
Mark D. Kvamme (1).......................................... 1,312,963 *
Joseph Marengi (1).......................................... 21,408 *
W. Barry Moore (1).......................................... 5,000 *
David P. Storch............................................. -- *
Edward V. Szofer (1)........................................ 955,154 *
John R. Torell, III (1)..................................... 208,012 *
Bert B. Young (1)........................................... 96,993 *
Kevin M. Gaskey............................................. -- *
Stanley F. Martin........................................... -- *
Directors and executive officers as a group (10 persons)
(1)....................................................... 15,686,923 10.7%
</TABLE>
- ------------------------
* less than 1%
(1) Includes shares of Common Stock which can be acquired through the exercise
of options within 60 days of March 31, 2000, as follows: Robert F. Bernard
185,313; Paul D. Carbery 5,000; Robert T. Clarkson 250,326; Mark D. Kvamme
86,438; Joseph Marengi 21,408; W. Barry Moore 5,000; Edward V. Szofer
314,674; John R. Torell, III 3,604; Bert B. Young 94,953; and all executive
officers and directors as a group 966,716.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Prior to September 1999, Robert F. Bernard, the Company's Chief Executive
Officer was a 16% owner of Fortress Technologies, Inc. ("Fortress"). During 1999
until the sale of Fortress's business on September 9, 1999, the Company leased
certain employees to Fortress and provided certain incidental office equipment
rental to Fortress in exchange for a total of $2,053,989.
Mr. Bernard acquired a one-third interest in Fourth Floor Consulting, Inc.
("Fourth Floor") on September 23, 1999, and entered into a credit agreement with
Fourth Floor. From August 31, 1999 to February 8, 2000, Fourth Floor purchased a
total of $3,550,000 in professional consulting services from the Company dated
August 31, 1999. On February 8, 2000, the Company purchased a license of Fourth
Floor's business model for a one-time royalty of $4,155,000. Fourth Floor repaid
Mr. Bernard the amount he had loaned Fourth Floor.
On December 16, 1999, the Company purchased from Covalex.com, Inc.
("Covalex") 2,500,000 shares of convertible preferred stock for $2,500,000 and
loaned Covalex $1,250,000 at an interest rate of 10% per annum, due August 31,
2000. Covalex entered into a consulting services agreement with the Company and
paid a nonrefundable retainer of $2,500,000 to the Company. Subsequently, on
March 21, 2000, the
13
<PAGE>
Company purchased an additional 1,179,245 shares of convertible preferred stock
for $2,500,000, and Covalex paid an additional $2,000,000 nonrefundable retainer
to the Company. Robert F. Steel, who was a director of the Company through
February 29, 2000, is an executive officer, director and approximately 19%
shareholder of Covalex. The Company's equity interest in Covalex was transferred
to BlueVector, L.L.C. ("BlueVector") in 2000, as part of the Company's capital
contribution for its 50% interest in BlueVector.
On January 19, 2000, the Company and Form and Function Capital L.L.C. ("Form
and Function") each purchased from HomeOriginals.com, Inc. ("HomeOriginals")
400,000 shares of convertible preferred stock for $2,000,000. Mr. Bernard is a
90% owner of Form and Function. As part of this transaction, the Company loaned
Form and Function the $2,000,000 purchase price. On April 14, 2000, Form and
Function repaid the loan with interest at a rate of 8% per annum. On
January 19, 2000, HomeOriginals entered into a consulting services agreement
with the Company agreeing to the purchase of no less than $4,000,000 of
services.
In July 1999, the Company entered into an agreement with Stanley F. Martin,
who was the Company's Executive Vice President, Strategic Services since
December 1998 through July 1999, regarding the termination of his employment
with the Company (the "Martin Agreement"). Pursuant to the Martin Agreement, the
Company agreed to pay to Mr. Martin approximately $5,000 which represents the
amount payable with respect to certain health care benefits. The Company also
agreed that previously granted options to purchase up to 34,870 shares of the
Company's Common Stock would become fully vested as of the date of the Martin
Agreement.
In August 1999, the Company entered into an agreement with Kevin M. Gaskey,
who was the Company's Chief Financial Officer and Treasurer since April 1990
through August 1999, regarding the termination of his employment with the
Company (the "Gaskey Agreement"). Pursuant to the Gaskey Agreement, the Company
agreed that previously granted options to purchase up to 48,600 shares of the
Company's Common Stock would become fully vested as of the date of the Gaskey
Agreement.
PROPOSAL II
APPROVAL OF THE MARCHFIRST, INC. AMENDED AND RESTATED
EMPLOYEE STOCK PURCHASE PLAN
GENERAL
The Company's Employee Stock Purchase Plan ("ESPP") was adopted by the Board
of Directors and approved by the stockholders on February 26, 1996. A total of
100,000 shares of Common Stock were initially reserved for issuance under the
ESPP. After giving effect to a four-for-one stock split in April 1996, a
two-for-one stock split in December 1996 and a two-for-one stock split in
July 1998, the number of shares reserved for issuance under the ESPP increased
from 100,000 shares to 1,600,000 shares. In connection with the Company's merger
with USWeb/CKS, the Company assumed outstanding options under the USWeb 1997
Employee Stock Purchase Plan and CKS Group, Inc. 1997 Employee Stock Purchase
Plan.
The Board of Directors believes that it is in the best interests of the
Company to continue to provide employees with an opportunity to purchase Common
Stock through payroll deductions. There currently are approximately 650,000
shares of Common Stock originally reserved and remaining available for issuance
under the ESPP. This amount is inadequate to meet anticipated demand, as the
Company expects significantly increased participation in the ESPP, largely due
to the increased number of employees resulting from the Company's merger with
USWeb/CKS. On April 3, 2000, the Board of Directors approved the amendment and
restatement to the ESPP to increase the number of shares reserved under the ESPP
by 6,650,000 shares, or approximately 4.6% of the outstanding shares of Common
Stock as of the record date, from 1,600,000 to 8,250,000 shares. Stockholder
approval of the amended and restated ESPP is being sought as required under the
ESPP and applicable provisions of the Internal Revenue Code.
14
<PAGE>
Following the approval of the amended and restated ESPP, there will be a total
of approximately 7,300,000 shares available for issuance under its ESPP, which
is equal to approximately 5.0% of the outstanding Common Stock as of the record
date. This amount excludes the 1,467,664 shares originally reserved and
remaining available for issuance pursuant to outstanding options under the USWeb
1997 Employee Stock Purchase Plan and the CKS Group, Inc. 1997 Employee Stock
Purchase Plan. The amended and restated ESPP also reflects certain other changes
to the terms of the ESPP as originally adopted and approved by stockholders. The
discussion below describes the terms of the ESPP as amended and restated.
SUMMARY OF THE ESPP
The following is a brief summary of certain provisions of the ESPP, as
amended and restated.
PURPOSE
The purpose of the ESPP is to provide employees of the Company and of its
qualified subsidiaries (as that term is defined in the ESPP) designated by the
Board of Directors with an opportunity to purchase Common Stock of the Company
at a discount through voluntary automatic payroll deductions and to encourage
such employees to continue in the employ of the Company and such subsidiaries.
ADMINISTRATION
The ESPP is currently administered by the compensation committee of the
Board of Directors (the "Committee"). All questions of interpretation or
application of the ESPP are determined in the sole discretion of the Committee,
and its decisions are final and binding upon all participants. Members of the
Board of Directors who are eligible employees are permitted to participate in
the ESPP but may not serve on the Committee. No charges for administrative or
other costs may be made against the payroll deductions of a participant in the
ESPP. Members of the Committee receive no additional compensation for their
services in connection with the administration of the ESPP.
ELIGIBILITY
Any person who is a current employee of the Company (or of any of its
qualified subsidiaries designated by the Board of Directors) as of the last
business day prior to an enrollment date is eligible to participate in the ESPP.
As of the record date, approximately 8,800 employees were eligible to
participate in the ESPP and approximately 5,200 employees were participating.
OFFERING PERIODS AND PURCHASE PERIODS
The ESPP is currently implemented by consecutive overlapping 24-month
offering periods each consisting of four consecutive six-month purchase periods.
The offering periods begin on each April 1 and October 1 during the term of the
ESPP or such other date as the Committee shall determine. The Committee in its
discretion may change the duration and start dates of future offering periods.
Eligible employees may elect to participate as of the first day of any
offering period. Any such election shall be made by completing and forwarding an
enrollment and payroll deduction authorization form to the Company prior to such
date. An employee who becomes eligible to participate in the ESPP after the
commencement of an offering period may not participate in the ESPP until the
commencement of the next offering period.
PURCHASE PRICE
The purchase price per share at which shares are purchased under the ESPP is
the lower of (a) 85% of the fair market value of a share of the Company's Common
Stock on the first day of the offering period or (b) 85% of the fair market
value of a share of the Company's Common Stock on the last day of the
15
<PAGE>
applicable purchase period. The fair market value of the Common Stock on a given
date is equal to the average of the high and low sales price as reported by
Nasdaq on such date, or if there were no sales on such date, the last preceding
date on which sales were reported.
PAYMENT OF PURCHASE PRICE; PAYROLL DEDUCTIONS
ESPP shares are purchased with funds that are accumulated through payroll
deductions during the offering period. The deductions may not exceed 15% of a
participant's cash compensation for each payroll period before any deduction for
required federal or state withholding or other amounts which may be withheld. A
participant may increase or decrease the rate of payroll deduction as of any
subsequent enrollment date by completing and filing with the Company a revised
payroll deduction authorization form. Subject to certain limitations contained
in the ESPP, a participant may increase or decrease his or her rate of payroll
deductions during an offering period by completing and filing a revised payroll
deduction authorization form with the Company. All payroll deductions are
credited to the participant's payroll deduction account under the ESPP. No
interest is credited to any payroll deductions account.
PURCHASE OF STOCK; EXERCISE OF OPTION
On the last day of each purchase period, the amount credited to each
participating employee's payroll deduction account shall be applied to purchase
as many shares of the Company's Common Stock as may be purchased with such
amount at the applicable purchase price; provided, that no employee shall be
permitted to purchase more than 1,600 shares during any purchase period or to
purchase shares having a fair market value in excess of $25,000 in any calendar
year. Any amounts remaining in an employee's payroll deduction account as of
such purchase date in excess of the amount that may properly be applied to the
purchase of shares of the Common Stock shall be refunded to the employee as soon
as practicable.
WITHDRAWAL
A participant may terminate his or her participation in the ESPP at any time
by signing and delivering to the Company a notice of withdrawal from the ESPP.
Upon receipt of such notice, payroll deductions on behalf of the employee shall
be discontinued commencing with the second full payroll period following the
Company's receipt of notice, and the employee may not again be eligible to
participate in the ESPP until the next enrollment date. Amounts credited to the
payroll deduction account of any employee who withdraws shall be paid to such
employee as soon as practicable after receipt of such employee's notice of
withdrawal.
TERMINATION OF EMPLOYMENT
If a participant's employment is terminated for any reason, including death,
payroll deductions on behalf of the employee shall be discontinued and any
amounts then credited to the employee's payroll deduction account for the then
current offering period shall be returned to the employee and shall not be used
to purchase shares of the Company Common Stock. However, in the case of
retirement after age 55 or death of the participant, the participant or the
participant's legal representative, as the case may be, may elect to have funds
remain in the participant's payroll deduction account until the end of the next
offering period and to have shares purchased in accordance with the terms of the
ESPP.
16
<PAGE>
CAPITAL CHANGES
If any change is made in the capitalization of the Company, such as stock
splits, stock dividends, mergers or consolidations, which results in an increase
or decrease in the number of shares of Common Stock outstanding, the number of
shares available for sale shall be equitably adjusted by the Committee to give
proper effect to such change.
AMENDMENT AND TERMINATION OF THE ESPP
The Board of Directors may at any time amend, suspend or terminate the ESPP.
If the ESPP is amended, such amendment will not be effective unless it is
approved within 12 months after the date of the adoption of such amendment by
the Company's stockholders if required under the terms of the ESPP. Upon
termination of the ESPP, all payroll deductions shall cease and all amounts then
credited to the participating employees' payroll deduction accounts shall, at
the option of the employee, be refunded or equitably applied to the purchase of
whole shares then available for sale, and any remaining amounts shall be
promptly refunded to the participating employees.
CERTAIN UNITED STATES FEDERAL INCOME TAX INFORMATION
The ESPP, and the right of participants to make purchases thereunder, is
intended to qualify under the provision of Sections 421 and 423 of the Internal
Revenue Code. Under these provisions, no income will be taxable to a participant
at the time of grant of the option or purchase of shares. Upon disposition of
the shares, the participant will generally be subject to tax and the amount of
the tax will depend upon the holding period. If the shares have been held by the
participant for more than two years after the offering date and more than one
year after the purchase date, the lesser of: (a) the excess of the fair market
value of the shares at the time of such disposition over the purchase price, or
(b) the excess of the fair market value of the shares at the time the option was
granted over the purchase price (which purchase price will be computed as of the
grant date) will be treated as ordinary income, and any further gain will be
treated as long-term capital gain. If the shares are disposed of before the
expiration of these holding periods, the excess of the fair market value of the
shares on the purchase date over the purchase price will be treated as ordinary
income, and any further gain or any loss on such disposition will be long-term
or short-term capital gain or loss, depending on the holding period. The Company
is not entitled to a deduction for amounts taxed as ordinary income or capital
gain to a participant, except to the extent of ordinary income reported by
participants upon disposition of shares prior to the expiration of the two
holding periods described above.
The foregoing is only a summary of the effect of United States federal
income taxation upon the participant and the Company under laws and regulations
currently in effect with respect to the purchase of shares under the ESPP, is
not intended to be complete and does not discuss the income tax laws of any
municipality, state or foreign country.
PARTICIPATION IN THE ESPP
Participation in the ESPP is voluntary and dependent on each eligible
employee's election to participate and such employee's determination as to the
level of payroll deduction. Accordingly, future purchases under the ESPP are not
determinable. Non-employee directors are not eligible to participate in the
ESPP. The following table sets forth certain information regarding shares
purchased under the ESPP during the last fiscal year and the payroll deductions
accumulated at the end of the last fiscal year in accounts under the ESPP for
each of the Named Executive Officers, for all executive officers as a group,
17
<PAGE>
for all non-executive officer directors as a group and for all non-executive
officer employees who participated in the ESPP as a group:
PLAN BENEFITS
EMPLOYEE STOCK PURCHASE PLAN
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME OF INDIVIDUAL OR IDENTITY OF GROUP AND POSITION PURCHASED (#) DOLLAR VALUE ($)(1)
- ---------------------------------------------------- ---------------- -------------------
<S> <C> <C>
Robert F. Bernard .......................................... 0 --
Chairman and Chief Executive Officer(2)
Edward V. Szofer ........................................... 0 --
President and Secretary(2)
Bert B. Young .............................................. 0 --
Chief Financial Officer and Treasurer(2)
Michael J. Berent .......................................... 0 --
Chief Operating Officer(2)(3)
Kevin M. Gaskey ............................................ 0 --
Chief Financial Officer and Treasurer(4)
Stanley F. Martin .......................................... 0 --
Executive Vice President, Strategic Services(5)
All executive officers as a group........................... 0 --
All non-executive officer directors as a group.............. 0 --
All non-executive officer employees as a group.............. 353,505 $7,168,889
</TABLE>
- ------------------------
(1) Market value of shares on date of purchase, minus the purchase price under
the ESPP.
(2) As of December 31, 1999.
(3) From December 1998 to June 1999, Mr. Berent served as Executive Vice
President, North American Operations of the Company. From June 1999 to
March 2000, he served as Chief Operating Officer of the Company. Since
March 1, 2000, Mr. Berent has served as Chief Combination Officer and is no
longer deemed to be an executive officer of the Company.
(4) Mr. Gaskey's employment terminated in August 1999.
(5) Mr. Martin's employment terminated in July 1999.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
MARCHFIRST, INC. AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN.
INDEPENDENT AUDITORS
The Company's independent public accountants for 1999 were KPMG LLP and the
Board of Directors, upon recommendation of the audit committee, has selected
KPMG LLP to audit the financial statements of the Company for the year ending
December 31, 2000. It is expected that representatives of KPMG LLP will be
present at the Annual Meeting and available to respond to questions. Such
representatives will be given an opportunity to make a statement if they desire
to do so.
18
<PAGE>
MISCELLANEOUS MATTERS
STOCKHOLDER LIST
A list of stockholders entitled to vote at the Annual Meeting, arranged in
alphabetical order, showing the address of, and number of shares registered in
the name of, each stockholder, will be open to the examination of any
stockholder for any purpose germane to the Annual Meeting, during ordinary
business hours, commencing May 14, 2000 and continuing through the date of the
Annual Meeting, at the principal executive offices of the Company, 311 South
Wacker Drive, Suite 3500, Chicago, Illinois 60606-6618.
SOLICITATION
The cost of this proxy solicitation will be borne by the Company. The
Company may request banks, brokers, fiduciaries, custodians, nominees and
certain other record holders to send proxies, proxy statements and other
materials to their principals at the Company's expense. Such banks, brokers,
fiduciaries, custodians, nominees and other record holders will be reimbursed by
the Company for their reasonable out-of-pocket expenses of solicitation. The
Company does not anticipate that costs and expenses incurred in connection with
this proxy solicitation will exceed an amount normally expended for a proxy
solicitation for an election of directors in the absence of a contest.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders for inclusion in proxy materials for the 2001
annual meeting of stockholders must be received by the secretary of the Company
no later than December 31, 2000. In addition, notice of any business to be
brought before the 2001 annual meeting of stockholders by a stockholder must be
delivered to the Company's corporate secretary, together with certain prescribed
information, not less than 60 and not more than 90 days prior to May 24, 2001;
provided that if the date of the 2001 Annual Meeting is either 30 days prior to
or more than 60 days after May 24, 2001, then such stockholder's notice must be
delivered not later than the later of 60 days prior to the Annual Meeting date
or ten days following the day on which public announcement of the meeting date
is first made.
ADDITIONAL INFORMATION
The Company will furnish, without charge, a copy of its Annual Report on
Form 10-K for the year ended December 31, 1999, as filed with the Securities and
Exchange Commission, upon the written request of any person who is a stockholder
as of the record date. Requests for such materials should be directed to
marchFIRST, Inc., 311 South Wacker Drive, Suite 3500, Chicago, Illinois
60606-6618, Attention: Corporate Secretary.
Please mark, date, sign and return the enclosed proxy at your earliest
convenience in the enclosed envelope. No postage is required for mailing in the
United States. A prompt return of your proxy will be appreciated.
By Order of the Board of Directors,
/s/ Edward V. Szofer
Edward V. Szofer
Chicago, Illinois
April 28, 2000
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MARCHFIRST, INC.
AMENDED AND RESTATED
EMPLOYEE STOCK PURCHASE PLAN
(AMENDED AS OF APRIL 3, 2000)
The purpose of the marchFIRST, Inc. Amended and Restated Employee Stock Purchase
Plan (the "Plan") is to provide an opportunity for the employees of marchFIRST,
Inc., formerly known as Whittman-Hart, Inc., (the "Company") and any qualified
subsidiaries to purchase shares of the Common Stock, par value $.001 per share,
of the Company ("Common Stock") at a discount through voluntary automatic
payroll deductions and to encourage such employees to continue in the employ of
and to exert their best efforts on behalf of the Company and such subsidiaries.
The Plan was approved by the stockholders of this Company on February 26, 1996.
1. SHARES SUBJECT TO PLAN. The aggregate number of shares of Common Stock
("Shares") that may be sold pursuant to the Plan is one million, six hundred
thousand and 00/100 shares (1,600,000).(1) Such Shares may be authorized but
unissued Common Stock, treasury shares or Common Stock purchased in the open
market. If there is any change in the outstanding shares of Common Stock by
reason of a stock dividend or distribution, stock split-up, recapitalization,
combination or exchange of shares, or by reason of any merger, consolidation
or other corporate reorganization in which the Company is the surviving
corporation, the number of Shares available for sale shall be equitably
adjusted by a committee ("Committee") appointed to administer the Plan to
give proper effect to such change.
2. ADMINISTRATION. The Plan shall be administered by a Committee consisting of
at least three members of the Board of Directors of the Company appointed from
time to time. Each member of the Committee shall be a non-employee director of
the Board of Directors. For as
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(1) Total amount of shares that may be sold pursuant to the Plan is being
increased to eight million, two hundred and fifty thousand and 00/100
shares (8,250,000), subject to shareholder approval.
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long as it continues to meet this requirement, the Compensation Committee of the
Board of Directors of the Company shall serve as the Committee. The Committee
shall have the authority to make rules and regulations governing the
administration of the Plan, and any interpretation or decision made by the
Committee regarding the administration of the Plan shall be final and
conclusive. The Committee may determine prior to each Offering Period (as
defined in paragraph 7) to limit the number of Shares which may be offered
during that Offering Period and the manner of allocating the Shares among
eligible employees.
3. ELIGIBILITY.
(a) All employees of the Company and of any qualified subsidiary of the
Company which may be designated by the Company's Board of Directors, other than
employees who have not been employed full time as of the last business day prior
to an Enrollment Date, shall be eligible to participate in the Plan. For the
purposes of this Plan, the term "qualified subsidiary" means any subsidiary,
more than 80% of the total combined voting power of all classes of stock of
which is now owned or hereafter acquired by the Company or any such qualified
subsidiary.
(b) Notwithstanding anything to the contrary in this Plan, the Company
shall not permit the exercise of any option to purchase Shares under this Plan:
(i) by any employee who, immediately after the option is granted,
would own shares possessing 5% or more of the total combined voting
power or value of all classes of stock of the Company or any
subsidiary; or
(ii) which would permit an employee's options to purchase shares under
this Plan, or under any other qualified employee stock purchase plan
maintained by
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the Company or any subsidiary, to accrue at a rate in excess of
$25,000 of the fair market value of such shares (determined at the
time such options are granted) for each calendar year in which the
option is outstanding at any time.
For the purposes of this paragraph 3(b), the provisions of Section 424(d)
of the Internal Revenue Code of 1986, as amended (the "Code") shall apply in
determining the stock ownership of an employee, and the shares which an employee
may purchase under outstanding rights or options shall be treated as shares
owned by the employee.
4. PARTICIPATION.
(a) An eligible employee may elect to participate in the Plan as of any
"Enrollment Date." Enrollment Dates shall occur on the first day of each
Offering Period (as defined in paragraph 7). Any such election shall be made by
completing and forwarding an enrollment and payroll deduction authorization form
to the Human Resources Department of the Company prior to such Enrollment Date,
authorizing payroll deductions in an amount (to be specified as a whole
percentage) not exceeding 15% of the employee's gross pay for the payroll period
to which the deduction applies. For purposes of this Plan, the term "gross pay"
means all base straight time gross earnings, overtime and commissions an
employee would receive at each regular pay period date determined (before any
deduction for required federal or state withholding and any other amounts which
may be withheld pursuant to medical or health plans, retirement plans or
otherwise), but shall not include shift premium, incentive compensation,
incentive payments, bonuses and other compensation.
(b) A participating employee may discontinue his or her participation in
the Plan as provided in paragraph 6 hereof, or increase or decrease the rate of
his or her payroll deductions
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as of any subsequent Enrollment Date by completing and forwarding a revised
payroll deduction authorization form to the Human Resources Department of the
Company. Subject to the limitations in paragraph 4(a), a participant may
increase or decrease the rate of his or her payroll deductions during the
Offering Period by completing and filing with the Company a revised payroll
deduction form authorizing a change in payroll deduction rate. The Committee
may, in its discretion, limit the number of participation rate changes during
any Offering Period. A change in the rate of participation during an Offering
Period shall be effective with the second full payroll period following the
Company's receipt of the revised payroll deduction form unless the Company
elects to process a given change in participation more quickly.
(c) Notwithstanding the foregoing, to the extent necessary to comply with
Section 423(b)(8) of the Code and paragraph 3(b)(ii) hereof, a participant's
payroll deductions may be decreased to zero percent (0%) at any time during a
Purchase Period. Payroll deductions shall recommence at the rate provided in
such participant's payroll deduction authorization at the beginning of the first
Purchase Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in paragraph 6 hereof.
5. PAYROLL DEDUCTION ACCOUNTS. The Company shall establish a "Payroll
Deduction Account" for each participating employee, and shall credit all payroll
deductions made on behalf of each employee pursuant to paragraph 4 to his or her
Payroll Deduction Account. No interest shall be credited to any Payroll
Deduction Account.
6. WITHDRAWALS. An employee may withdraw from an Offering Period at any time
by completing and forwarding a written notice to the Human Resources Department
of the Company. Upon receipt of such notice, payroll deductions on behalf of the
employee shall be
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discontinued commencing with the second full payroll period following the
Company's receipt of a written notice of withdrawal, and such employee may not
again be eligible to participate in the Plan until the next Enrollment Date.
Amounts credited to the Payroll Deduction Account of any employee who withdraws
shall be paid to him (without interest thereon) as soon as practicable after
receipt of his notice of withdrawal.
7. OFFERING PERIODS; GRANT OF OPTION.
(a) Except as otherwise provided in this paragraph 7, the Plan shall be
implemented by consecutive, overlapping Offering Periods. An "Offering Period"
is a period of approximately twenty-four (24) months during which an option
granted under the Plan may be exercised, with a new Offering Period commencing
on the first "trading day" on or after the first day of each April and October
during the term of the Plan, or on such other date as the Committee shall
determine, and continuing thereafter to the end of such period, subject to
termination in accordance with paragraph 16 hereof. The Committee shall have the
power to change the duration of Offering Periods (including the commencement
dates thereof) with respect to future offerings.
(b) Subject to the eligibility requirements and limitations set forth in
paragraphs 3 and 4 hereof, on the Enrollment Date of each Offering Period, each
eligible employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of Shares determined by dividing such
participant's payroll deductions accumulated prior to such Exercise Date and
retained in the participant's Payroll Deduction Account as of the Exercise Date
by the applicable Purchase Price; provided that in no event shall an employee be
permitted to purchase during each Purchase Period more than 1,600 Shares
(subject to any adjustments made pursuant to paragraph
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1), and provided further that such purchase shall be subject to the limitations
set forth in paragraph 3(b) hereof. Exercise of the option shall occur as
provided in paragraph 8 hereof, unless the participant has withdrawn pursuant to
paragraph 6. The option shall expire on the last day of the Offering Period.
(c) For purposes of this Plan, the term "Exercise Date" shall mean the last
trading day of each Purchase Period. A "trading day" shall mean a day on which
sales of Common Stock are reported on the Nasdaq National Market. A "Purchase
Period" shall mean the approximately six-month period commencing after one
Exercise Date and ending with the next Exercise Date, except that the first
Purchase Period of any Offering Period shall commence on the Enrollment Date and
end with the next Exercise Date.
(d) To the extent permitted by any applicable laws, regulations, or stock
exchange rules, if the Fair Market Value (as defined below) of the Common Stock
on any Exercise Date in an Offering Period is lower than the Fair Market Value
of the Common Stock on the Enrollment Date of such Offering Period, then all
participants in such Offering Period shall be automatically withdrawn from such
Offering Period immediately after the exercise of their option on such Exercise
Date and automatically re-enrolled in the immediately following Offering Period
as of the first day thereof.
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8. EXERCISE OF OPTION TO PURCHASE SHARES.
(a) Unless a participant withdraws from the Plan as provided in paragraph 6
hereof, his or her option for the purchase of Shares shall be exercised
automatically on the Exercise Date, and the maximum number of full Shares plus
any fractional interest in a Share subject to the option shall be purchased for
such participant at the applicable Purchase Price with the accumulated payroll
deductions in his Payroll Deduction Account. Except as provided in paragraph 12,
employees may purchase Shares only through payroll deductions, and cash
contributions shall not be permitted. Any amounts remaining in an employee's
Payroll Deduction Account as of the relevant Exercise Date in excess of the
amount that may be properly applied to the purchase of Shares shall be refunded
to the employee (without interest thereon) as soon as practicable.
(b) The "Purchase Price" for Shares purchased shall be an amount equal to
the lesser of (i) 85% of the average of the high and low reported sales prices
of shares of Common Stock on the first day of the Offering Period as reported on
the Nasdaq National Market, and (ii) 85% of the average of the high and low
reported sales prices of shares of Common Stock on the last day of the Purchase
Period as reported on the Nasdaq National Market. If no sales of Common Stock
were reported on a date, the Purchase Price shall be determined from the average
price of the Common Stock reported for the last preceding date on which sales of
Common Stock were so reported. For purposes of this Plan, the "Fair Market
Value" of a Share of Common Stock on the relevant measurement date shall mean
the average of the high and low reported sales prices of shares of Common Stock
on such date as reported on the Nasdaq National Market.
(c) At the time the option is exercised, in whole or in part, or at the
time some or all of the Company's Common Stock issued under the Plan is disposed
of, the participant must make adequate provision for the Company's federal,
state, or other tax withholding obligations, if any,
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which arise upon the exercise of the option or the disposition of the Common
Stock. At any time, the Company may, but shall not be obligated to, withhold
from the participant's compensation the amount necessary for the Company to meet
applicable withholding obligations, including any withholding required to make
available to the Company any tax deductions or benefits attributable to a sale
or early disposition of Common Stock by a participant.
9. BROKERAGE ACCOUNTS OR PLAN SHARE ACCOUNTS. By enrolling in the Plan,
each participating employee shall be deemed to have authorized the
establishment of a brokerage account on his or her behalf at a securities
brokerage firm selected by the Committee. Alternatively, the Committee may
provide for Plan share accounts for each participating employee to be
established by the Company or by an outside entity selected by the Committee
which is not a brokerage firm. Shares purchased by an employee pursuant to
the Plan shall be held in the employee's brokerage or Plan share account
("Plan Share Account") in his or her name, or if the employee so indicates on
his or her payroll deduction authorization form, in the employee's name
jointly with a member of the employee's family, with right of survivorship.
An employee who is a resident of a jurisdiction which does not recognize such
a joint tenancy may request that such Shares be held in his or her name as
tenant in common with a member of the employee's family, without right of
survivorship.
10. RIGHTS AS STOCKHOLDER. An employee shall have no rights as a stockholder
with respect to Shares subject to any rights granted under this Plan until
payment for such Shares has been completed at the close of business on the
relevant Exercise Date. An employee shall have no right to vote any fractional
interest in a Share credited to his account.
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11. CERTIFICATES. Certificates for Shares purchased under the Plan will not be
issued automatically. However, certificates for whole Shares purchased shall be
issued as soon as practicable following an employee's written request. The
Company may make a reasonable charge for the issuance of such certificates.
Fractional interests in Shares shall be carried forward in an employee's Plan
Share Account until they equal one whole Share or until the termination of the
employee's participation in the Plan, in which event an amount in cash equal to
the value of such fractional interest shall be paid to the employee in cash
(subject to paragraph 12).
12. TERMINATION OF EMPLOYMENT. If a participating employee's employment is
terminated for any reason, including death, if an employee is granted a leave of
absence of more than 90 days duration or if an employee otherwise ceases to be
eligible to participate in the Plan, payroll deductions on behalf of the
employee shall be discontinued and any amounts then credited to the employee's
Payroll Deduction Account for the then current Offering Periods shall be
returned to him and shall not be used to purchase Shares; provided however, that
in the event of retirement after age 55 (or such earlier qualified early
retirement age as may be elected by the employee under the Company's 401 Profit
Sharing Defined Contribution Plan and Trust or successor plan), the employee, or
in the event of death, his legal representative, shall have the right to elect,
by written notice given to the Treasurer of the Company, prior to the earlier of
the end of the then current Offering Periods or the expiration of a period of
sixty days commencing with the date of death or retirement to either:
(a) withdraw all of the amounts then credited in the employee's Payroll
Deduction Account; or
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(b) elect to purchase, effective on the Exercise Date next following the
date of the employee's retirement or death, the number of full Shares which
the accumulated amounts in the employee's Payroll Deduction Account will
purchase at the applicable Purchase Price, and any excess in such account
will be returned to the employee or legal representative, subject to the
limitations in paragraph 3 hereof; or
(c) elect to purchase the number of Shares which the employee would have
been eligible to purchase on the next Exercise Date had amounts been
continued to be deposited in the employee's Payroll Deduction Account
during the current Offering Period pursuant to the employee's then current
enrollment and payroll deduction authorization, provided such election is
accompanied by a lump sum payment for the additional amount which would
have been so withheld and deposited, subject to the limitations in
paragraph 3 hereof. If the employee receives variable compensation, such
lump sum amount shall be determined by the Company based upon prior
compensation.
In the event no such written notice of election is received by the Treasurer of
the Company, the retired employee or legal representative of a deceased employee
shall be deemed to have elected option (a).
13. RIGHTS NOT TRANSFERABLE. Rights granted under this Plan are not
transferable by a participating employee other than by will or the laws of
descent and distribution, and are exercisable during an employee's lifetime only
by the employee.
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14. EMPLOYMENT RIGHTS. Neither participation in the Plan, nor the exercise of
any option granted under the Plan, shall be made a condition of employment, or
of continued employment with the Company or any subsidiary.
15. APPLICATION OF FUNDS. All funds received by the Company for Shares sold by
the Company on any Exercise Date pursuant to this Plan may be used for any
corporate purpose.
16. AMENDMENTS AND TERMINATION. The Board of Directors may amend the Plan at
any time, provided that no such amendment shall be effective unless approved
within 12 months after the date of the adoption of such amendment by the
affirmative vote of stockholders holding shares of Common Stock entitled to a
majority of the votes represented by all outstanding shares of Common Stock
entitled to vote if such stockholder approval is required for the Plan to
continue to comply with the requirements of Securities and Exchange
Commission Regulation Section 240.16b-3 and Section 423 of the Internal
Revenue Code. The Board of Directors may suspend the Plan or discontinue the
Plan at any time. Upon termination of the Plan, all payroll deductions shall
cease and all amounts then credited to the participating employees' Payroll
Deduction Accounts shall at the option of the employee be refunded or
equitably applied to the purchase of whole Shares then available for sale,
and any remaining amounts shall be promptly refunded to the participating
employees.
17. APPLICABLE LAWS. This Plan, and all rights granted hereunder, are intended
to meet the requirements of an "employee stock purchase plan" under Section 423
of the Code, as from time to time amended, and the Plan shall be construed and
interpreted to accomplish this intent. Sales of Shares under the Plan are
subject to, and shall be accomplished only in accordance with, the requirements
of all applicable securities and other laws.
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18. EXPENSES. Except to the extent provided in paragraph 11, all expenses of
administering the Plan, including expenses incurred in connection with the
purchase of Shares for sale to participating employees, shall be borne by the
Company and its subsidiaries.
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marchFIRST, INC.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 24, 2000.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert F. Bernard and Edward V. Szofer,
and each of them, with full power of substitution, as attorneys and proxies for,
and in the name and place of, the undersigned and hereby authorizes each of them
to represent and to vote all of the shares of Common Stock of the Company held
of record by the undersigned as of April 13, 2000 that the undersigned is
entitled to vote at the Annual Meeting of Stockholders of the Company to be held
on May 24, 2000 at 10:00 a.m., central time, at The Institute for Strategic
Education, 320 North Elizabeth Street, Chicago, Illinois 60607, and at any
adjournments thereof. The undersigned stockholder hereby revokes any proxy or
proxies heretofore given.
PLEASE MARK, SIGN, DATE AND RETURN THIS CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
IF YOU RECEIVE MORE THAN ONE PROXY CARD, PLEASE MARK, SIGN, DATE AND RETURN
ALL CARDS IN THE ENCLOSED ENVELOPE.
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marchFIRST, INC.
/X/ PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE USING DARK INK ONLY.
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" ALL OF THE NOMINEES FOR
DIRECTOR AND "FOR" THE PROPOSAL TO APPROVE THE MARCHFIRST, INC. AMENDED AND
RESTATED EMPLOYEE STOCK PURCHASE PLAN
WITHHOLD
FOR AUTHORITY
ALL FOR ALL
1. Election of / / / / NOMINEES: Mark D. Kvamme
Directors (Terms
to expire in 2003) Joseph Marengi
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space below.)
- -----------------------------------------------
2. Proposal of the Board of Directors to approve the marchFIRST, Inc.
Amended and Restated Employee Stock Purchase Plan.
FOR AGAINST ABSTAIN
/ / / / / /
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting, or any
adjournments thereof.
UNLESS CONTRARY DIRECTION IS GIVEN, THIS PROXY, WHEN PROPERLY EXECUTED,
WILL BE VOTED "FOR" ALL NOMINEES LISTED IN PROPOSAL 1, "FOR" PROPOSAL 2 AND IN
ACCORDANCE WITH THE JUDGMENT OF THE PERSONS NAMED AS PROXIES HEREIN AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and Proxy Statement.
Dated: ______________________, 2000
Signature(s)_____________________________
Please, date and sign exactly as the name appears hereon. When signing as
executor, administrator, trustee, guardian, attorney-in-fact or other fiduciary,
please give title as such. When signing as a corporation, please sign in full
corporate name by president or other authorized officer. When signing as a
partnership or limited liability company, please sign in partnership or limited
liability company name by an authorized person.
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- FOLD AND DETACH HERE -
PLEASE MARK, SIGN, DATE AND RETURN THIS CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
