<PAGE> 1
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 (AMENDMENT NO. )
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 sec. 240.14a-11(c) or sec. 240.14a-12
THE METZLER 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:
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<PAGE> 2
THE METZLER GROUP, INC.
520 LAKE COOK ROAD, SUITE 500
DEERFIELD, ILLINOIS 60015
November 7, 1997
Dear Stockholder:
It is my pleasure to invite you to a Special Meeting of Stockholders of The
Metzler Group, Inc. The meeting will be held at 9:00 a.m. on Friday, November
21, 1997, at the Company's principal offices, located at 520 Lake Cook Road,
Suite 500, Deerfield, Illinois.
As explained further in the accompanying Notice of Special Meeting of
Stockholders and Proxy Statement, the items which will be discussed during the
Special Meeting consist of proposals to amend the Company's Certificate of
Incorporation and its Incentive Plan. It is important that you vote your shares
whether or not you plan to attend the Special Meeting. To be sure your vote is
counted, we urge you to carefully review the Proxy Statement and vote your
shares. PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING
ENVELOPE AS SOON AS POSSIBLE. If you attend the Special Meeting and wish to vote
in person, the ballot that you submit at the Special Meeting will supersede your
proxy.
I look forward to seeing you at the Special Meeting. On behalf of the
management and directors of The Metzler Group, Inc., I want to thank you in
advance for your continued support and confidence in us.
Sincerely,
/s/ ROBERT P.MAHER
ROBERT P. MAHER
Chairman of the Board, President and
Chief Executive Officer
<PAGE> 3
THE METZLER GROUP, INC.
520 LAKE COOK ROAD, SUITE 500
DEERFIELD, ILLINOIS 60015
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 21, 1997
To the Stockholders of The Metzler Group, Inc.:
A Special Meeting of Stockholders of The Metzler Group, Inc., a Delaware
corporation (the "Company"), will be held at the Company's principal office,
located at 520 Lake Cook Road, Suite 500, Deerfield, Illinois, on Friday,
November 21, 1997, at 9:00 a.m. local time for the following purposes, as more
fully described in the accompanying Proxy Statement:
The Special Meeting is for the following purposes:
(1) To consider and vote upon a proposed amendment to the Company's
Certificate of Incorporation to increase the Company's total
authorized common stock to 75,000,000 shares;
(2) To consider and vote upon a proposed amendment to the Company's
Incentive Plan (i) to increase the number of shares of the Company's
common stock available for issuance pursuant to the Incentive Plan
to 2,000,000 shares and (ii) to provide for adjustments from time to
time in the number of shares available for issuance pursuant to the
Incentive Plan so that the number of shares available for issuance
under the Incentive Plan remains at a constant 15% of the number of
outstanding shares of the Company common stock; and
(3) To transact such other business as may properly come before the
Special Meeting or any adjournments thereof.
Stockholders of record of the Company's common stock, par value $0.001 per
share, at the close of business on November 3, 1997, the record date fixed by
the Board of Directors, are entitled to notice of, and to vote at, the Special
Meeting, as more fully described in the Proxy Statement. For ten days prior to
the Special Meeting, a list of stockholders entitled to vote at the Special
Meeting with the address of and number of shares held by each will be kept on
file at the offices of the Company at 520 Lake Cook Road, Suite 500, Deerfield,
Illinois and at the offices of the Company's transfer agent, Harris Trust and
Savings Bank, located at 311 W. Monroe Street, Chicago, Illinois, and will be
subject to inspection by any stockholder at any time during usual business
hours. The list will also be available for inspection by any stockholder during
the Special Meeting.
Stockholders who cannot attend are urged to sign, date and otherwise
complete the enclosed proxy card and return it promptly in the envelope
provided. Any stockholder giving a proxy has the right to revoke it at any time
before it is voted.
For the Board of Directors,
/s/ Barry S. Cain
BARRY S. CAIN
Assistant Secretary
Deerfield, Illinois
November 7, 1997
<PAGE> 4
THE METZLER GROUP, INC.
520 LAKE COOK ROAD, SUITE 500
DEERFIELD, ILLINOIS 60015
---------------------
PROXY STATEMENT
---------------------
The following information is provided in connection with the solicitation
of proxies for a Special Meeting of Stockholders of The Metzler Group, Inc., a
Delaware corporation ("Metzler" or the "Company"), to be held on November 21,
1997, and adjournments thereof (the "Special Meeting"), for the purposes stated
in the Notice of Special Meeting of Stockholders preceding this Proxy Statement.
VOTING OF SHARES
This Proxy Statement and the accompanying proxy card are being mailed to
stockholders, beginning on or about November 7, 1997, in connection with the
solicitation of proxies on behalf of the Board of Directors of Metzler (the
"Board") for the Special Meeting. Proxies are solicited to give all stockholders
of record on November 3, 1997 (the "Record Date"), an opportunity to vote on
matters to be presented at the Special Meeting. Shares can be voted at the
Special Meeting only if the stockholder is present or represented by proxy.
Each share of the Company's common stock, par value $0.001 per share (the
"Common Stock"), represented at the Special Meeting is entitled to one vote on
each matter properly brought before the meeting. Please specify your choices by
marking the appropriate boxes on the enclosed proxy card and signing it. The
proposals to amend the Company's Certificate of Incorporation and to adopt the
First Amendment to The Metzler Group, Inc. Long Term Incentive Plan shall be
determined by a majority of the votes cast. If no directions are given and the
signed card is returned, the persons named in the proxy card will vote the
shares in favor of both of the proposals, and at their discretion on any other
matter that may properly come before the Special Meeting in accordance with
their best judgment. If a broker or other nominee holding shares for a
beneficial owner does not vote on a proposal (broker non-votes), the shares will
not be counted in determining the number of votes cast. Stockholders voting by
proxy may revoke that proxy at any time before it is voted at the Special
Meeting by delivering to the Company a proxy bearing a later date or by
attending in person and casting a ballot.
YOUR VOTE IS IMPORTANT. PLEASE RETURN YOUR MARKED AND SIGNED PROXY CARD
PROMPTLY SO YOUR SHARES CAN BE REPRESENTED, EVEN IF YOU PLAN TO ATTEND THE
SPECIAL MEETING IN PERSON.
As of the Record Date, 13,289,088 shares of Common Stock were issued and
outstanding.
<PAGE> 5
ITEM NO. 1 -- AMENDMENT OF THE COMPANY'S
CERTIFICATE OF INCORPORATION
In October 1997, the Board of Directors proposed and recommended for
adoption by the Company's stockholders an amendment to the Certificate that
would increase the Company's total authorized Common Stock from 15,000,000
shares to 75,000,000 shares. No change will be made to the number of authorized
shares of Preferred Stock, none of which is currently outstanding. The Company's
stockholders are asked to approve this amendment.
DISCUSSION OF THE PROPOSAL
The proposed amendment provides that paragraph A of Article Four of the
Certificate be amended to read in its entirety as follows:
AUTHORIZED SHARES. The total number of shares of all classes of stock
which the Corporation shall have authority to issue is seventy-eight
million (78,000,000), consisting of seventy-five million (75,000,000)
shares of Common Stock, $.001 par value per share (the "Common Stock"),
and three million (3,000,000) shares of Preferred Stock, $.001 par value
per share (the "Preferred Stock").
As of October 31, 1997, there were 13,298,088 shares of Common Stock issued
and outstanding, and a total of 1,681,608 shares reserved for issuance under the
Company's Stock Purchase Plan and the Company's Incentive Plan. Consequently,
20,304 shares of Common Stock were available for future issuance as of such
date.
The Board of Directors believes that it is desirable for the Company to
have available additional authorized but unissued shares of Common Stock to
provide the Company with shares of Common Stock to be used for general corporate
purposes, future acquisitions and equity financings. Since the Company's initial
public offering, it has issued a total of 2,697,760 shares of Common Stock, and
issued options to acquire [ ] shares, in connection with three
acquisitions. Approval of the proposed amendment now will eliminate the delays
and expense which otherwise would be incurred if stockholder approval were
required to increase the authorized number of shares of Common Stock for
possible future transactions involving the issuance of additional shares. An
increase in the number of authorized shares will also increase the number of
shares which may be reserved and subsequently issued pursuant to the Incentive
Plan and other employee benefit plans. Additional issuances of Common Stock will
also increase the public float, and therefore the liquidity of the Common Stock
for all holders. In addition, in light of the Company's stock price performance,
the Company's Board of Directors is currently considering effecting a stock
split. This would not be possible unless the authorized number of shares were
increased.
Effect Of Increase. The additional shares of Common Stock may be issued,
subject to certain exceptions, by the Board of Directors at such times, in such
amounts and upon such terms as the Board may determine without further approval
of the stockholders. The Company's current stockholders could suffer a dilution
of voting rights, net income and net tangible book value per share of the Common
Stock as the result of any such issuance of Common Stock depending on the number
of shares issued and the purpose, terms and conditions of the issuance. The
additional shares of Common Stock could have an "anti-takeover" effect in that
they could discourage an attempt to obtain control of the Company by means of a
merger, tender offer, proxy contest or otherwise and could make the removal of
the present management of the Company more difficult. Such shares could be
issued for the purpose of making more difficult, time-consuming or costly an
acquisition of a controlling interest in the Company deemed undesirable by the
Board of Directors, even if such acquisition is desired by certain stockholders
of the Company. The Company's stockholders have no preemptive rights to
subscribe for additional shares when issued.
VOTE REQUIRED; DIRECTORS' RECOMMENDATION
Approval of the proposed amendment requires the affirmative vote of the
holders of a majority of the shares of Common Stock outstanding as of the Record
Date. THE BOARD OF DIRECTORS RECOMMENDS THAT
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STOCKHOLDERS VOTE FOR THE AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION TO INCREASE THE COMPANY'S TOTAL AUTHORIZED COMMON STOCK. THE
PROXIES SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS WILL BE VOTED FOR
APPROVAL OF THE AMENDMENT, UNLESS A CONTRARY CHOICE IS SPECIFIED IN THE PROXY.
ITEM NO. 2 -- AMENDMENT OF THE COMPANY'S
INCENTIVE PLAN
The Board of Directors of the Company has adopted, subject to stockholder
approval, the First Amendment to the Metzler Group, Inc. Long-Term Incentive
Plan (the "Incentive Plan"). In the event that stockholder approval is received,
the Incentive Plan would be amended as set forth in Appendix A.
DISCUSSION OF PROPOSAL
The main purpose for amending the Incentive Plan is to increase the number
of shares available for grant thereunder.
Under the Incentive Plan, a total of 1,300,000 shares of common stock have
currently been reserved for issuance, subject to adjustment on the first day of
each calendar year by 10% of the increase in the number of shares of common
stock of the Company outstanding on December 31 of the preceding year over the
number of shares of common stock outstanding on January 1 of the preceding
calendar year. Because of the Company's decision to make the Incentive Plan
available to greater numbers of employees (and broader classes of employees),
the need to issue options in connections with acquisitions and the Company's
anticipated needs for flexibility in compensating its key employees in the
future and otherwise as needed to sustain future growth in the Company's
operations, in October 1997, the Board of Directors adopted, subject to
stockholder approval, an amendment to increase to 2,000,000 the aggregate number
of shares reserved for issuance under the Incentive Plan. In addition, the First
Amendment provides further that the number of shares available for issuance
pursuant to the Incentive Plan shall be automatically adjusted from time to time
to ensure that a constant 15% of the number of outstanding shares of the
Company's Common Stock is available for issuance, or have been issued under the
Incentive Plan.
The Company's business depends entirely upon the efforts of its employees.
The Company's Board of Directors and management have determined that broad
equity ownership, through stock options, is an appropriate mechanism to
correlate the interests of employees and stockholders, to reward employees for
performance, and, through period vesting over time, incentivize and reward
employee retention.
In addition, the Company intends to consider acquisitions as a part of its
consolidation strategy. Because the acquisitions may involve both the issuance
of additional shares of Common Stock as consideration and an increase in the
number of employees, the Board of Directors considered it appropriate to provide
that the number of shares available for grant under the Incentive Plan would be
automatically increased in proportion to additional share issuances.
As of October 15, 1997, the market value of the 700,000 additional shares
proposed to be reserved at this time for issuance under the Incentive Plan was
$25,900,000. Cash payments received by the Company under the Incentive Plan will
be used for general corporate purposes. No more than 200,000 shares may be
granted under the Incentive Plan in any one calendar year to any one employee.
DESCRIPTION OF THE PLAN
General
The purpose of the Incentive Plan, which was originally adopted by the
Board of Directors of the Company and approved by the stockholders in June,
1996, is to assist the Company in attracting and retaining key employees, and
also independent contractors, non-employee directors and consultants, and to
give such persons a greater proprietary interest in, and closer identity with,
the Company and its financial success. The Incentive Plan authorizes the Company
to make grants ("Awards") of Incentive Stock Options (within the meaning of
Section 422 of the Code), Non-Qualified (or non-statutory) Stock Options (the
Incentive and Non-Qualified Stock Options issued under the Incentive Plan are
referred to collectively as "Options"), Restricted Stock, Stock Appreciation
Rights ("SARs"), Performance Awards and Cash Awards.
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The Incentive Plan is administered by a committee of the Board of Directors
consisting of two or more Board members (the "Committee"). The Committee has
complete discretion to determine which employees and non-employees will be
recipients of Awards under the Incentive Plan (the "Participants") and to
establish the terms, conditions and limitations of each Award (subject to the
terms of the Incentive Plan and the applicable provisions of the Code),
including the type and amount of the Award, the number of shares of common stock
to be subject to Options or Restricted Stock, or the amount of cash to be
included in the Award, the exercise price of any Options and the date or dates
upon which the Options become exercisable or upon which any restrictions
applicable to any common stock included in the Award lapse. The Committee also
has full power to construe and interpret the Plan and the Awards granted under
the Plan, and to establish rules and regulations necessary or advisable for its
administration.
Awards under the Incentive Plan may be granted only to key employees and
key non-employees (non-employee directors, consultants, or independent
contractors) of the Company and its subsidiaries. The Committee will determine
whether a particular employee or non-employee qualifies as a "Key Employee" or
"Key Non-Employee." Awards may be granted to a prospective employee, conditioned
upon such person becoming an employee.
The Board may amend the Plan in any respect, except that the following
changes may not be made without stockholder approval: (i) the maximum number of
shares available for Awards may not be increased except upon stock splits and
dividends, combinations and similar events, (ii) the requirements as to
eligibility may not be materially modified, (iii) the benefit to participants
may not be materially increased, (iv) the period during which Incentive Options
may be granted or exercised may not be extended, and (v) the class of employees
eligible to receive Incentive Options may not be modified.
Terms and Conditions of Awards under the Incentive Plan
Awards under the Incentive Plan may consist of any combination of one or
more Incentive or Non-Qualified Options, Restricted Stock, SARs, Performance
Awards or Cash Awards, on a stand alone, combination or tandem basis. The
Committee may specify that Awards other than Options will be paid in cash,
shares of common stock, or a combination of cash and common stock.
The Committee is permitted to cancel any unexpired, unpaid, unexercised or
deferred Awards at any time if a Participant (a) provides services for a
competitor, (b) discloses confidential Company information, or (c) fails to
disclose and convey to the Company any invention or idea developed by the
Participant during employment by the Company and relating to the business of the
Company. Unless otherwise described below for Options, or as may be provided in
the Award, all unexpired, unpaid, unexercised or deferred Awards will be
canceled immediately if a Participant ceases his or her employment with the
Company and its subsidiaries, except for (a) retirement under a Company
retirement plan, (b) retirement in the best interest of the Company (as
determined by the Company's chief executive or other designated senior officer),
or (c) termination of the Participant's employment upon his or her death or
disability. Upon retirement under a Company retirement plan or termination in
the best interests of the Company, the Committee may permit Awards to continue,
and may accelerate exercisability and vesting. Upon the death or disability of a
Participant, his or her estate or beneficiaries (or the Participant in the case
of disability) may exercise or receive benefits under the Award until the
original expiration date as provided in the Award (or within one year in the
case of Options) and the Committee may in its discretion accelerate the vesting
or terminate the restrictions to which the Award is subject.
Upon any change in the nature or number of outstanding shares of common
stock due to stock split, stock dividend, merger, reorganization or similar
event, adjustments will be made to the numbers of shares and the applicable
exercise and base prices under outstanding Awards to prevent dilution or
enlargement of the Awards previously granted.
Both Incentive and Non-Qualified Options may be granted pursuant to the
Incentive Plan. Incentive Options must have an exercise price per share equal to
at least the fair market value of a share at the time the
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Award is granted. As required by the Code, if an Incentive Option is granted to
a Participant who owns more than ten percent of the voting power of the Company
(a "Significant Stockholder"), then the exercise price per share will be not
less than one hundred ten percent (110%) of fair market value on the date of
grant. Fair market value equals the closing sales price of the common stock on
the date of grant. The exercise price for Non-Qualified Options will be
determined by the Committee in its sole discretion on the date of grant, and,
except as may be determined to be appropriate by the Committee pursuant to
Section 162(m) of the Code, may be less than fair market value. The maximum term
of all Incentive Options granted under the Incentive Plan is ten years.
(Incentive Options granted to a Significant Stockholder have a maximum term of
five years.) The term of Non-Qualified Options may be set by the Committee in
its discretion. No Options may be granted more than ten years from the date the
Incentive Plan was adopted. Except as otherwise determined by the Committee, all
Options are non-transferable and may be exercised during a Participant's
lifetime only by the Participant.
At the time an Option is awarded, the Committee will specify the date or
dates upon which the Option, or portions of the Option, becomes exercisable. The
permissible manner of payment for the purchase price upon exercise of the Option
(such as cash, check, the transfer of previously owned, fully paid shares, or
through a "cashless" exercise) will be set by the Committee in the particular
Award agreement or by general rules.
A Participant who ceases to be an employee or "Key Non-Employee" of the
Company or its subsidiaries for any reason other than death, disability or
termination "for cause" will be permitted to exercise any Option, to the extent
it was exercisable on the date of such cessation, but only within three months
of such cessation. A Participant who is terminated for "cause," as defined in
the Incentive Plan, will immediately lose all rights to exercise any Options. If
a Participant dies, his or her estate or personal representative may exercise
the Option, to the extent it was exercisable on the date of death. If a
Participant becomes permanently disabled, he or she may exercise an Option to
the extent it was exercisable at the time of the onset of the disability or, if
the Option vests periodically, to the extent it would have been exercisable as
of the next vesting date. In the case of either death or disability, the Option
must be exercised within twelve (12) months after the date of death or onset of
disability, and prior to the original expiration date of the Option.
The Committee may award shares of common stock (or grant an Award
denominated in units of common stock) on a restricted basis. The terms of a
Restricted Stock Award, including the consideration, if any, to be paid by the
Participant to acquire the stock and the restrictions placed upon such shares
and the time or times or event or events upon which such restrictions will
lapse, will be determined by the Committee at the time the Award is made and
will be described in the Award agreement. After the Restricted Stock is awarded,
the Participant will be a stockholder with respect to such stock, and will have
rights to vote and receive dividends with respect to such stock. Shares of
Restricted Stock may not be transferred, assigned or pledged prior to the lapse
of the applicable restrictions. The Committee, in its discretion, may accelerate
the date on which the restrictions lapse.
The Committee may award SARs either alone, in tandem or in combination with
an Option or other Award. An SAR will permit the Participant to receive, upon
exercise, cash or shares of common stock equal in value to the excess of the
fair market value of a share of common stock as of the exercise date over the
base price set by the Committee at the time the SAR is granted, multiplied by
the number of shares of common stock then being exercised under the SAR. The
base price will be at least the fair market value of a share of common stock on
the date of grant, unless a lower base price is approved by the Board of
Directors. SARs will become exercisable upon the date or dates, or the
occurrence of the events, set by the Committee at the time of grant. An SAR may
only be exercised by the Participant or, if applicable, by the Participant's
personal representative.
Under the provisions of the Incentive Plan, all members of the Board of
Directors who are not employees of the Company will receive an Option to
purchase 9,000 shares. The Option will be granted on the date such person is
first appointed or elected to the Board. Each continuing non-employee member of
the Board of Directors will receive an additional Award of an Option to purchase
9,000 shares upon reelection and qualification as a non-employee member of the
Board of Directors. Each Option issued to a non-employee member of the Board of
Directors will become exercisable in equal annual installments on the first
through
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third anniversaries of the date of grant, provided, however, each such Option
will become immediately exercisable if the non-employee director ceases to be a
director because of death or disability.
The Committee may award Performance Awards or Cash Awards under the
Incentive Plan, subject to restrictions and conditions and other terms as
determined by the Committee at the time of the Award. The Committee may use
business criteria and other measures of performance it deems appropriate in
establishing any conditions, and may exercise its discretion to increase or
decrease the amounts payable under any Awards subject to performance conditions,
except as otherwise may be limited in the case of a Performance Award intended
to qualify under Code sec.162(m). A Performance or Cash Award will be subject to
cancellation or forfeiture upon the terms set forth above.
Federal Income Tax Effects
Under the Code, as presently in effect, the grant of an Option or SAR or
the award of Restricted Stock under the Incentive Plan will not generate federal
income to a Participant or a deduction to the Company.
Upon exercise of a Non-Qualified Option or an SAR, the Participant will
normally be deemed to have received ordinary income in an amount equal to the
difference between the exercise price for the Option and the fair market value
of the Company's common stock on the exercise date or, in the case of an SAR,
equal to the amount of payment received from the Company (less any exercise
price, if applicable). The Company will be entitled to a tax deduction in the
same amount as is recognized by the Participant at the same time, provided the
Company includes and reports such amounts on a timely filed Form W-2 or Form
1099-MISC (or similar such IRS form filing). Upon a disposition of shares
acquired upon exercise of a Non-Qualified Option, any amount received in excess
of the market value of the shares at the time of exercise of the Option
generally will be treated as long-term or short-term capital gain, depending on
the holding period of the shares. The Company will not be entitled to any tax
deduction upon such subsequent disposition.
In the case of Incentive Options, the Participant recognizes no ordinary
income on the date of grant or exercise. If the Participant holds the stock
acquired through exercise of an Incentive Option for one year from the date of
exercise and two years from the date of grant, the Participant will thereafter
recognize long-term capital gain or loss upon a subsequent sale of the stock,
based on the difference between the Incentive Option's exercise price and the
sale price. If the stock is sold before the requisite holding period, the
Participant will recognize ordinary income based upon the difference between the
exercise price and the lesser of the sales price or the fair market value upon
the date of exercise. The Company generally will be allowed a business expense
deduction only if, and to the extent, the Participant recognizes ordinary
income.
For Awards of Restricted Stock, the fair market value of the stock is not
taxable to the Participant as ordinary income until the year the Participant's
interest is freely transferable or no longer subject to a substantial risk of
forfeiture. Section 83 of the Code, however, permits a Participant to elect to
have the fair market value of the stock taxed as ordinary income in the year the
Award if received. Dividends on Restricted Stock are treated as ordinary income
at the time paid. The Company generally will be entitled to a deduction equal to
the amount of ordinary income recognized by the Participant.
Upon the grant of a Performance or Cash Award, the Participant will
recognize ordinary income equal to the amount of the award, which amount will be
includable in the Participant's taxable income in the year such cash award is
paid. The Company will be entitled to a deduction in the same year equal to the
amount of the Award.
VOTE REQUIRED; DIRECTORS' RECOMMENDATION
The First Amendment to the Incentive Plan became effective on October ,
1997 by Board resolution, subject to its approval by the Company's stockholders.
Accordingly, approval of the First Amendment to the Incentive Plan requires the
affirmative vote of the holders of a majority of the shares of common stock
outstanding and present in person or by proxy at the annual meeting. THE BOARD
OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL OF THE FIRST
AMENDMENT TO THE INCENTIVE PLAN. THE PROXIES SOLICITED BY AND ON
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BEHALF OF THE BOARD OF DIRECTORS WILL BE VOTED FOR APPROVAL OF THE INCENTIVE
PLAN, UNLESS A CONTRARY CHOICE IS SPECIFIED IN THE PROXY.
OTHER MATTERS TO COME BEFORE THE MEETING
If any matter not described herein should properly come before the Special
Meeting, the persons named in the proxy card will vote the shares in accordance
with their best judgment. At the same time this Proxy Statement went to press,
the Company knew of no other matters which might be presented for stockholder
action at the Special Meeting.
STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE
OFFICERS AND PRINCIPAL HOLDERS
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of October 31, 1997 by: (i) each person known by
the Company to own beneficially more than five percent of the outstanding shares
of Common Stock; (ii) each of the Company's directors; (iii) each of the Named
Executive Officers; and (iv) all directors and executive officers of the Company
as a group. (Each person named below has an address in care of the Company's
principal executive offices.) The Company believes that each person named below
has sole voting and investment power with respect to all shares of Common Stock
shown as beneficial owned by such holder, subject to community property laws
where applicable.
[TO BE UPDATED]
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED(1)
--------------------
NAME OF BENEFICIAL OWNER NUMBER PERCENT
------------------------ --------- -------
<S> <C> <C>
Lloyd Harvego............................................... 1,497,593 11.3
David J. Donovan............................................ 1,060,000 8.0
Stephen R. Goldfield........................................ 1,060,000 8.0
Gerald R. Lanz.............................................. 1,060,000 8.0
James T. Ruprecht........................................... 1,060,000 8.0
Robert P. Maher............................................. 943,429 7.1
Richard J. Metzler(2)....................................... 600,000 4.5
James F. Hillman............................................ -- --
Peter B. Pond............................................... -- --
Mitchell H. Saranow......................................... -- --
All Directors and Executive Officers as a group (6
persons).................................................. 3,063,429 2.3
</TABLE>
- ---------------
(1) Applicable percentage of ownership as of October 31, 1997 is based upon
shares of Common Stock outstanding. Beneficial ownership is determined in
accordance with the rules of the Securities and Exchange Commission, and
includes voting and investment power with respect to the shares shown as
beneficially owned.
(2) Mr. Metzler maintains control over 250,000 shares held of record by Metzler
Family Investments, L.P., in his capacity as general partner.
VOTING PROCEDURES
Abstentions and broker non-votes are counted for purposes of determining
the presence or absence of a quorum for the transaction of business at the
Special Meeting of Stockholders. Votes that are withheld and broker non-votes
not be counted in determining the number of votes cast.
7
<PAGE> 11
SOLICITATION OF PROXIES
All expenses incident to the solicitation of proxies by the Company will be
paid by the Company. Solicitation may be made personally, or by telephone,
telegraph or mail, by one or more employees of the Company, without additional
compensation. The Company will reimburse brokerage houses and other custodians,
nominees and fiduciaries for reasonable out-of-pocket expenses incurred in
forwarding copies of solicitation material to beneficial owners of Common Stock
held of record by such persons.
The above Notice of Special Meeting and Proxy Statement are sent by order
of the Company's Board of Directors.
/s/ Barry S. Cain
BARRY S. CAIN
Assistant Secretary
Deerfield, Illinois
November 3, 1997
8
<PAGE> 12
APPENDIX A
Text of Amendment to the Incentive Plan
FIRST AMENDMENT TO THE
METZLER GROUP, INC.
LONG-TERM INCENTIVE PLAN
The Metzler Group, Inc. Long-Term Incentive Plan shall be amended,
effective November 1, 1997, as follows:
The first paragraph of Article III ("SHARES SUBJECT TO THE PLAN") shall be
amended to read as follows:
The aggregate number of Shares as to which Awards may be granted from
time to time shall be Two Million (2,000,000) Shares (subject to
adjustments for stock splits, stock dividends, and other adjustments
described in Article XVIII hereof); provided, however, that the number
of Shares available for issuance under the Plan shall automatically
increase, but not decrease, on a continuing basis by an amount equal to
fifteen percent (15%) of the increase from time to time, in the number
of shares of the capital stock of the Company then outstanding. No
Incentive Options may be granted on the basis of the additional Shares
resulting from such increases.
This First Amendment is adopted effective the 1st day of November, 1997.
THE METZLER GROUP, INC.
By:
--------------------------------------
Its:
--------------------------------------
<PAGE> 13
THE METZLER GROUP, INC. SPECIAL MEETING TO BE HELD ON 11/21/97 AT 09:00 A.M.
CDT FOR HOLDERS AS OF 11/3/97
34147 10-0207
CUSIP: 592903108
CONTROL NO.
DIRECTORS
<TABLE>
<CAPTION>
DIRECTORS
PROPOSAL(S) RECOMMEND
- ----------- ---------
<S> <C>
1 - APPROVAL OF AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO
INCREASE THE TOTAL AUTHORIZED COMMON STOCK -------------------------------------->>> FOR --->>>
2 - APPROVAL OF THE FIRST AMENDMENT TO THE INCENTIVE PLAN --------------------------->>> FOR --->>>
</TABLE>
*NOTE* SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT THEREOF
- --------------------------------------------------------------------------------
THE METZLER GROUP, INC.
11/21/97 AT 09:00 A.M. CDT
DIRECTORS
(MARK "X" FOR ONLY ONE BOX)
FOR AGAINST ABSTAIN
1 /X/ /X/ /X/ PLEASE INDICATE YOUR PROPOSAL SELECTION BY
FIRMLY PLACING AN "X" IN THE APPROPRIATE /X/
NUMBERED BOX WITH BLUE OR BLACK INK ONLY
DO NOT USE SEE VOTING INSTRUCTION NO. ON REVERSE
--
DO NOT USE ACCOUNT NO:
FOR AGAINST ABSTAIN CUSIP: 592903108
2 /X/ /X/ /X/ CONTROL NO:
DO NOT USE CLIENT NO:
DO NOT USE PLACE "X" HERE IF YOU PLAN TO
VOTE YOUR SHARES AT THE MEETING
FOR AGAINST ABSTAIN
DO NOT USE
DO NOT USE
DO NOT USE
FOR AGAINST ABSTAIN
DO NOT USE
DO NOT USE
DO NOT USE
FOR AGAINST ABSTAIN
DO NOT USE [BAR CODE]
DO NOT USE
DO NOT USE
/
------------------------------- ------,---
SIGNATURE(S) DATE
