<PAGE>
Registration No. 333-30267
As filed with the Securities and Exchange Commission on March 31, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
_______________________
THE METZLER GROUP, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 36-4094854
(State or other Jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
615 North Wabash Avenue (312) 573-5600
Chicago, Illinois 60611 (Telephone number, including
(Address, Including Zip Code, of area code, of registrant's
registrant's principal executive offices) principal executive offices)
</TABLE>
THE METZLER GROUP, INC. LONG-TERM INCENTIVE PLAN
(Full Title of the Plan)
Robert P. Maher
Chief Executive Officer
The Metzler Group, Inc.
615 North Wabash Avenue
Chicago, Illinois 60611
(Name, address, including zip code and telephone number, including area code, of
agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of each class Proposed maximum Proposed maximum Amount of
of securities to be Amount to be offering price per aggregate offering registration fee(2)
registered registered(1) share(2) price(2)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par
value $.01 per share 4,200,000 30.88 $129,675,000 $38,254
=====================================================================================================================
</TABLE>
(1) This Registration Statement includes any additional shares of the
registrant's Common Stock that may be issued pursuant to antidilution
provisions contained in the plan.
(2) Pursuant to Rule 457(h), the registration fee was computed on the basis of
the average of the high and low prices of the registrant's Common Stock on
the Nasdaq National Market on March 24, 1999.
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
The contents of the Form S-8 Registration Statement under the Securities Act
of 1933, File No. 333-30267, which was filed with the Commission on June 27,
1997, are incorporated by reference in this Post-Effective Amendment No. 1 to
the Form S-8 Registration Statement.
2
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Chicago, State of Illinois, on the 30th day of
March, 1999.
The Metzler Group, Inc.
By: /s/ Robert P. Maher
-------------------
Chief Executive Officer
3
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned hereby appoint Robert P. Maher as our attorney-in-fact to
execute and file in our name and on our behalf, in all capacities as officers or
directors of The Metzler Group, Inc., Registration Statements on Form S-8 and
all amendments thereto (including post-effective amendments) to be filed with
the Securities and Exchange Commission, relating to the issuance, through The
Metzler Group, Inc. Long-Term Incentive Plan, of common stock of The Metzler
Group, Inc., par value $0.01 per share.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney on the
30th day of March, 1999.
/s/ Barry S. Cain /s/ James R. Thompson
- ----------------- ----------------------
Barry S. Cain James R. Thompson
4
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in their respective
capacities on this 30th day of March, 1999.
Signature Title
--------- -----
/s/ Robert P. Maher
- -------------------
Robert P. Maher Chairman of the Board of Directors, President and
Chief Executive Officer (Principal Executive Officer)
/s/ James F. Hillman
- --------------------
James F. Hillman Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)
/s/ Barry S. Cain
- -----------------
Barry S. Cain Vice President, Chief Administrative Officer and
Director
*/s/ James T. Ruprecht
- ----------------------
James T. Ruprecht Director
*/s/ Peter B. Pond
- ------------------
Peter B. Pond Director
/s/ James R. Thompson
- ---------------------
James R. Thompson Director
*/s/ Mitchell H. Saranow
- ------------------------
Mitchell H. Saranow Director
*By: /s/ Robert P. Maher
- ------------------------
Robert P. Maher, Attorney-in-Fact
5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- ------------------- -----------------------------------------------------------
<C> <S>
4.1 Amended and Restated Certificate of Incorporation of The
Metzler Group, Inc.(1)
4.2 Amendment No. 1 to Amended and Restated Certificate of
Incorporation of The Metzler Group, Inc. (2)
4.3 Amended and Restated By-Laws of The Metzler Group, Inc.(3)
4.4 The Metzler Group, Inc. Long-Term Incentive Plan, as
amended
5 Opinion of Sachnoff & Weaver, Ltd.
23 Consent of KPMG Peat Marwick LLP
24 Powers of Attorney (contained on the signature page hereto)
</TABLE>
(1) Incorporated by reference from the Registrant's Amendment No. 1 to
Registration Statement on Form S-1 (Registration No. 333-9019) as filed
with the SEC on September 4, 1996.
(2) Incorporated by reference from the Registrant's Registration Statement on
Form S-3 (Registration No. 333-40489) as filed with the SEC on November 18,
1997.
(3) Incorporated by reference from the Registrant's Amendment No. 1 to
Registration Statement on Form S-3 (Registration No. 333-40489) filed with
the SEC on February 12, 1998.
6
<PAGE>
EXHIBIT 4.4
THE METZLER GROUP, INC.
LONG-TERM INCENTIVE PLAN
<PAGE>
THE METZLER GROUP, INC
LONG-TERM INCENTIVE PLAN
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
I. PURPOSE................................................................-1-
II. DEFINITIONS............................................................-1-
A. Affiliate......................................................-1-
B. Award..........................................................-1-
C. Award Agreement................................................-2-
D. Board..........................................................-2-
E. Cash Award.....................................................-2-
F. Code...........................................................-2-
G. Committee......................................................-2-
H. Common Stock...................................................-2-
I. Company........................................................-2-
J. Disability or Disabled.........................................-3-
K. Exchange Act...................................................-3-
L. Fair Market Value..............................................-3-
M. Formula Option.................................................-3-
N. Incentive Option...............................................-3-
O. Key Employee...................................................-3-
P. Key Non-Employee...............................................-3-
Q. Non-Employee Board Member......................................-3-
R. Nonstatutory Option............................................-3-
S. Option.........................................................-4-
T. Participant....................................................-4-
U. Performance Award..............................................-4-
V. Plan...........................................................-4-
W. Restricted Stock...............................................-4-
X. Right..........................................................-4-
Y. Shares.........................................................-4-
III. SHARES SUBJECT TO THE PLAN.............................................-4-
IV. ADMINISTRATION OF THE PLAN.............................................-5-
V. ELIGIBILITY FOR PARTICIPATION..........................................-6-
VI. AWARDS UNDER THIS PLAN.................................................-7-
A. Incentive Option...............................................-7-
B. Nonstatutory Option............................................-7-
</TABLE>
<PAGE>
C. Formula Option...............................................-7-
D. Restricted Stock.............................................-7-
E. Stock Appreciation Right.....................................-8-
F. Performance Awards...........................................-8-
G. Cash Awards..................................................-8-
VII. TERMS AND CONDITIONS OF INCENTIVE OPTIONS AND
NONSTATUTORY OPTIONS.................................................-8-
A. Option Price.................................................-8-
B. Number of Shares.............................................-9-
C. Term of Option...............................................-9-
D. Date of Exercise.............................................-9-
E. Medium of Payment............................................-9-
F. Termination of Employment....................................-9-
G. Total and Permanent Disability..............................-10-
H. Death.......................................................-11-
I. Exercise of Option and Issuance of Stock....................-11-
J. Rights as a Stockholder.....................................-12-
K. Assignability and Transferability of Option.................-12-
L. Other Provisions............................................-12-
M. Purchase for Investment.....................................-12-
VIII. FORMULA OPTIONS.....................................................-13-
IX. REQUIRED TERMS AND CONDITIONS OF RESTRICTED STOCK...................-14-
X. REQUIRED TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS..........-16-
XI. PERFORMANCE AWARDS..................................................-17-
XII. REQUIRED TERMS AND CONDITIONS OF CASH AWARDS........................-18-
XIII. TERMINATION OF EMPLOYMENT...........................................-19-
A. Retirement under a Company or Affiliate Retirement Plan.....-19-
B. Resignation in the Best Interests of the
Company or an Affiliate...................................-19-
C. Death or Disability of a Participant........................-19-
XIV. CANCELLATION AND RESCISSION OF AWARDS...............................-20-
XV. PAYMENT OF RESTRICTED STOCK, RIGHTS, PERFORMANCE AWARDS AND
CASH AWARDS..............................................-21-
XVI. WITHHOLDING.........................................................-21-
<PAGE>
XVII. SAVINGS CLAUSE.......................................................-22-
XVIII. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION;
CORPORATE TRANSACTIONS...............................................-22-
XIX. DISSOLUTION OR LIQUIDATION OF THE COMPANY............................-23-
XX. TERMINATION OF THE PLAN..............................................-23-
XXI. AMENDMENT OF THE PLAN................................................-24-
XXII. EMPLOYMENT RELATIONSHIP..............................................-24-
XXIII. INDEMNIFICATION OF COMMITTEE.........................................-24-
XXIV. UNFUNDED PLAN........................................................-24-
XXV. MITIGATION OF EXCISE TAX.............................................-25-
XXVI. EFFECTIVE DATE.......................................................-25-
XXVII. GOVERNING LAW........................................................-25-
<PAGE>
THE METZLER GROUP, INC.
LONG-TERM INCENTIVE PLAN
I. PURPOSE
The Metzler Group, Inc. Long-Term Incentive Plan is adopted June 30, 1996.
The Plan is designed to attract and retain selected Key Employees and Key Non-
Employees of the Company and its Affiliates, and reward them for making major
contributions to the success of the Company and its Affiliates. These objectives
are accomplished by making long-term incentive awards under the Plan that will
offer Participants an opportunity to have a greater proprietary interest in, and
closer identity with, the Company and its Affiliates and their financial
success.
The Awards may consist of:
(i) Incentive Options;
(ii) Nonstatutory Options;
(iii) Formula Options;
(iv) Restricted Stock;
(v) Rights;
(vi) Performance Awards; or
(vii) Cash Awards
or any combination of the foregoing, as the Committee may determine.
The Plan is intended to qualify certain compensation awarded under the
Plan for tax deductibility under Section 162(m) of the Code to the extent deemed
appropriate by the Committee. The Plan and the grant of Awards hereunder are
expressly conditioned upon the Plan's approval by the stockholders of the
Company. If such approval is not obtained, then this Plan and all Awards
hereunder shall be null and void ab initio.
II. DEFINITIONS
A. Affiliate means any individual, corporation, partnership, association,
joint-stock company, trust, unincorporated association or other entity
(other than the Company) that, for purposes of Section 422 of the Code,
is aparent or subsidiary of the Company, direct or indirect.
B. Award means the grant to any Key Employee or Key Non-Employee of any form
of Option, Restricted Stock, Right, Performance Award, or Cash Award,
whether granted
<PAGE>
singly, in combination, or in tandem, and pursuant to such terms, conditions,
and limitations as the Committee may establish in order to fulfill the
objectives of the Plan.
C. Award Agreement means an agreement entered into between the
Company and a Participant under which an Award is granted and which sets forth
the terms, conditions, and limitations applicable to the Award.
D. Board means the Board of Directors of the Company.
E. Cash Award means an Award of cash, subject to the requirements of
Article XII and such other restrictions as the Committee deems appropriate or
desirable.
F. Code means the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute thereto
G. Committee means the committee to which the Board delegates the
power to act under or pursuant to the provisions of the Plan, or the Board if no
committee is selected. If the Board delegates powers to a committee, and if the
Company is or becomes subject to Section 16 of the Exchange Act, then, if
necessary for compliance therewith, such committee shall consist initially of
not less than two (2) members of the Board, each member of which must be a "non-
employee director," within the meaning of the applicable rules promulgated
pursuant to the Exchange Act. If the Company is or becomes subject to Section 16
of the Exchange Act, no member of the Committee shall receive any Award pursuant
to the Plan or any similar plan of the Company or any Affiliate while serving on
the Committee, unless the Board determines that the grant of such an Award
satisfies the then current Rule 16b-3 requirements under the Exchange Act.
Notwithstanding anything herein to the contrary, and insofar as it is necessary
in order for compensation recognized by Participants pursuant to the Plan to be
fully deductible to the Company for federal income tax purposes, each member of
the Committee also shall be an "outside director" (as defined in regulations or
other guidance issued by the Internal Revenue Service under Code Section
162(m)).
H. Common Stock means the common stock of the Company.
I. Company means, on the date the Plan is adopted, Metzler &
Associates, Inc., an Illinois corporation, provided, however, that The Metzler
Group, Inc. shall become the Company upon, or as soon as practicable after, the
effective date of the reorganization of the Company (pursuant to which
reorganization Metzler & Associates, Inc. shall become a one hundred percent
(100%) subsidiary of The Metzler Group, Inc.). For all purposes hereunder,
Company includes any successor or assignee corporation or corporations into
which the Company may be merged, changed, or consolidated; any corporation for
whose securities the securities of the Company shall be exchanged; and any
assignee of or successor to substantially all of the assets of the Company.
-2-
<PAGE>
J. Disability or Disabled means a permanent and total disability as
defined in Section 22(e)(3) of the Code.
K. Exchange Act means the Securities Exchange Act of 1934, as amended
from time to time, or any successor statute thereto.
L. Fair Market Value means, if the Shares are listed on any national
securities exchange, the closing sales price, if any, on the largest such
exchange on the valuation date, or, if none, on the most recent trade date
immediately prior to the valuation date provided such trade date is no more than
thirty (30) days prior to the valuation date. If the Shares are not then listed
on any such exchange, the fair market value of such Shares shall be the closing
sales price if such is reported, or otherwise the mean between the closing "Bid"
and the closing "Ask" prices, if any, as reported in the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") for the valuation date,
or if none, on the most recent trade date immediately prior to the valuation
date provided such trade date is no more than thirty (30) days prior to the
valuation date. If the Shares are not then either listed on any such exchange or
quoted in NASDAQ, or there has been no trade date within such thirty (30) day
period, the fair market value shall be the mean between the average of the "Bid"
and the average of the "Ask" prices, if any, as reported in the National Daily
Quotation System for the valuation date, or, if none, for the most recent trade
immediately prior to the valuation date provided such trade date is no more than
thirty (30) days prior to the valuation date. If the fair market value cannot be
determined under the preceding three sentences, it shall be determined in good
faith by the Committee.
M. Formula Option means a Nonstatutory Option granted automatically to a
Non-Employee Board Member upon his or her initial election, and any subsequent
re-election, as a Non-Employee Board Member.
N. Incentive Option means an Option that, when granted, is intended to be
an "incentive stock option," as defined in Section 422 of the Code.
O. Key Employee means an employee of the Company or of an Affiliate who
is designated by the Committee as being eligible to be granted one or more
Awards under the Plan.
P. Key Non-Employee means a Non-Employee Board Member, consultant,
advisor or independent contractor of the Company or of an Affiliate who is
designated by the Committee as being eligible to be granted one or more Awards
under the Plan.
Q. Non-Employee Board Member means a director of the Company who is not
an employee of the Company or any of its Affiliates.
R. Nonstatutory Option means an Option that, when granted, is not
intended to be an "incentive stock option," as defined in Section 422 of the
Code.
-3-
<PAGE>
S. Option means a right or option to purchase Common Stock, including
Restricted Stock if the Committee so determines.
T. Participant means a Key Employee or Key Non-Employee to whom one or
more Awards are granted under the Plan.
U. Performance Award means an Award subject to the requirements of
Article XI, and such performance conditions as the Committee deems appropriate
or desirable.
V. Plan means The Metzler Group, Inc. Long-Term Incentive Plan, as
amended from time to time.
W. Restricted Stock means an Award made in Common Stock or denominated in
units of Common Stock and delivered under the Plan, subject to the requirements
of Article IX, such other restrictions as the Committee deems appropriate or
desirable, and as awarded in accordance with the terms of the Plan.
X. Right means a stock appreciation right delivered under the Plan,
subject to the requirements of Article X and as awarded in accordance with the
terms of the Plan.
Y. Shares means the following shares of the capital stock of the Company
as to which Options or Restricted Stock have been or may be granted under the
Plan and upon which Rights or units of Restricted Stock may be based: treasury
or authorized but unissued Common Stock, no par value, of the Company (or,
following the reorganization of the Company, treasury or authorized but unissued
Common Stock, $.01 par value, of the Company), or any shares of capital stock
into which the Shares are changed or for which they are exchanged within the
provisions of Article XVIII of the Plan.
III. SHARES SUBJECT TO THE PLAN
The aggregate number of Shares as to which Awards may be granted from time
to time shall be one million, three hundred thousand (1,300,000) Shares (subject
to adjustment 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 on the first trading
day of each calendar year by an amount equal to ten percent (10%) of the
increase, if any, in the number of shares of the capital stock of the Company
outstanding on December 31 of the preceding calendar year over the number of
shares of the capital stock of the Company outstanding on January 1 of the
preceding calendar year. No Incentive Options may be granted on the basis of the
additional Shares resulting from such annual increases.
-4-
<PAGE>
In accordance with Code Section 162(m), if applicable, the aggregate number
of Shares as to which Awards may be granted in any one calendar year to any one
Key Employee shall not exceed three hundred thousand (300,000) Shares (subject
to adjustment for stock splits, stock dividends, and other adjustments described
in Article XVIII hereof).
From time to time, the Committee and appropriate officers of the Company
shall take whatever actions are necessary to file required documents with
governmental authorities and stock exchanges so as to make Shares available for
issuance pursuant to the Plan. Shares subject to Awards that are forfeited,
terminated, expire unexercised, canceled by agreement of the Company and the
Participant, settled in cash in lieu of Common Stock or in such manner that all
or some of the Shares covered by such Awards are not issued to a Participant, or
are exchanged for Awards that do not involve Common Stock, shall immediately
become available for Awards. Awards payable in cash shall not reduce the number
of Shares available for Awards under the Plan.
Except as otherwise set forth herein, the aggregate number of Shares as to
which Awards may be granted shall be subject to change only by means of an
amendment of the Plan duly adopted by the Company and approved by the
stockholders of the Company within one year before or after the date of the
adoption of the amendment.
IV. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee. A majority of the
Committee shall constitute a quorum at any meeting thereof (including by
telephone conference) and the acts of a majority of the members present, or acts
approved in writing by a majority of the entire Committee without a meeting,
shall be the acts of the Committee for purposes of this Plan. The Committee may
authorize one or more of its members or an officer of the Company to execute and
deliver documents on behalf of the Committee. A member of the Committee shall
not exercise any discretion respecting himself or herself under the Plan. The
Board shall have the authority to remove, replace or fill any vacancy of any
member of the Committee upon notice to the Committee and the affected member.
Any member of the Committee may resign upon notice to the Board. The Committee
may allocate among one or more of its members, or may delegate to one or more of
its agents, such duties and responsibilities as it determines. Subject to the
provisions of the Plan, the Committee is authorized to:
A. Interpret the provisions of the Plan and any Award or Award Agreement,
and make all rules and determinations that it deems necessary or advisable to
the administration of the Plan;
B. Determine which employees of the Company or an Affiliate shall be
designated as Key Employees and which of the Key Employees shall be granted
Awards;
-5-
<PAGE>
C. Determine the Key Non-Employees to whom Awards, other than Incentive
Options and Performance Awards for which Key Non-Employees shall not be
eligible, shall be granted;
D. Determine whether an Option to be granted shall be an Incentive Option
or Nonstatutory Option;
E. Determine the number of Shares for which an Option or Restricted Stock
shall be granted;
F. Determine the number of Rights, the Cash Award or the Performance
Award to be granted;
G. Provide for the acceleration of the right to exercise any Award, other
than an Award for Formula Options, which may not be accelerated; and
H. Specify the terms, conditions, and limitations upon which Awards may
be granted;
provided, however, that with respect to Incentive Options, all such
interpretations, rules, determinations, terms, and conditions shall be made and
prescribed in the context of preserving the tax status of the Incentive Options
as incentive stock options within the meaning of Section 422 of the Code.
The Committee may delegate to the chief executive officer and to other
senior officers of the Company or its Affiliates its duties under the Plan
pursuant to such conditions or limitations as the Committee may establish,
except that only the Committee may select, and grant Awards to, Participants who
are subject to Section 16 of the Exchange Act. All determinations of the
Committee shall be made by a majority of its members. No member of the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any Award.
The Committee shall have the authority at any time to cancel Awards for
reasonable cause and to provide for the conditions and circumstances under which
Awards shall be forfeited.
Any determination made by the Committee pursuant to the provisions of the
Plan shall be made in its sole discretion, and in the case of any determination
relating to an Award, may be made at the time of the grant of the Award or,
unless in contravention of any express term of the Plan or an Agreement, at any
time thereafter. All decisions made by the Committee pursuant to the provisions
of the Plan shall be final and binding on all persons, including the Company and
the Participants. No determination shall be subject to de novo review if
challenged in court.
-6-
<PAGE>
V. ELIGIBILITY FOR PARTICIPATION
Awards may be granted under this Plan only to Key Employees and Key Non-
Employees of the Company or its Affiliates. The foregoing notwithstanding, each
Participant receiving an Incentive Option must be a Key Employee of the Company
or of an Affiliate at the time the Incentive Option is granted.
The Committee may at any time and from time to time grant one or more
Awards to one or more Key Employees or Key Non-Employees and may designate the
number of Shares, if applicable, to be subject to each Award so granted,
provided, however that no Incentive Option shall be granted after the expiration
of ten (10) years from the earlier of the date of the adoption of the Plan by
the Company or the approval of the Plan by the stockholders of the Company, and
provided further, that the Fair Market Value of the Shares (determined at the
time the Option is granted) as to which Incentive Options are exercisable for
the first time by any Key Employee during any single calendar year (under the
Plan and under any other incentive stock option plan of the Company or an
Affiliate) shall not exceed One Hundred Thousand Dollars ($100,000). To the
extent that the Fair Market Value of such Shares exceeds One Hundred Thousand
Dollars ($100,000), the Shares subject to Option in excess of One Hundred
Thousand Dollars ($100,000) shall, without further action by the Committee,
automatically be converted to Nonstatutory Options.
Notwithstanding any of the foregoing provisions, the Committee may
authorize the grant of an Award to a person not then in the employ of, or
engaged by, the Company or of an Affiliate, conditioned upon such person
becoming eligible to be granted an Award at or prior to the execution of the
Award Agreement evidencing the actual grant of such Award.
VI. AWARDS UNDER THIS PLAN
As the Committee may determine, the following types of Awards may be
granted under the Plan on a stand alone, combination, or tandem basis:
A. Incentive Option
An Award in the form of an Option that shall comply with the requirements
of Section 422 of the Code. Subject to adjustments in accordance with the
provisions of Article XVIII, the aggregate number of Shares that may be subject
to Incentive Options under the Plan shall not exceed one million three hundred
thousand (1,300,000).
-7-
<PAGE>
B. Nonstatutory Option
An Award in the form of an Option that shall not be intended to comply
with the requirements of Section 422 of the Code.
C. Formula Option
An Award in the form of an Option granted to a Non-Employee Board Member
at the time of his or her initial election to the Board, or any subsequent re-
election.
D. Restricted Stock
An Award made to a Participant in Common Stock or denominated in units of
Common Stock, subject to future service and such other restrictions and
conditions as may be established by the Committee, and as set forth in the Award
Agreement, including but not limited to continuous service with the Company or
its Affiliates, achievement of specific business objectives, increases in
specified indices, attaining growth rates, and other measurements of Company or
Affiliate performance.
E. Stock Appreciation Right
An Award in the form of a Right to receive the excess of the Fair Market
Value of a Share on the date the Right is exercised over the Fair Market Value
of a Share on the date the Right was granted.
F. Performance Awards
An Award made to a Participant that is subject to performance conditions
specified by the Committee, including but not limited to continuous service with
the Company or its Affiliates, achievement of specific business objectives,
increases in specified indices, attaining growth rates, and other measurements
of Company or Affiliate performance.
G. Cash Awards
An Award made to a Participant and denominated in cash, with the eventual
payment subject to future service and such other restrictions and conditions as
may be established by the Committee, and as set forth in the Award Agreement.
Each Award under the Plan shall be evidenced by an Award Agreement. Delivery of
an Award Agreement to each Participant shall constitute an agreement between the
Company and the Participant as to the terms and conditions of the Award.
-8-
<PAGE>
VII. TERMS AND CONDITIONS OF INCENTIVE OPTIONS AND NONSTATUTORY OPTIONS
Each Option shall be set forth in an Award Agreement, duly executed on
behalf of the Company and by the Participant to whom such Option is granted.
Except for the setting of the Option price under Paragraph A, no Option shall be
granted and no purported grant of any Option shall be effective until such Award
Agreement shall have been duly executed on behalf of the Company and by the
Participant. Each such Award Agreement shall be subject to at least the
following terms and conditions:
A. Option Price
The purchase price of the Shares covered by each Option granted under the
Plan shall be determined by the Committee. The Option price per share of the
Shares covered by each Nonstatutory Option shall be at such amount as may be
determined by the Committee in its sole discretion on the date of the grant of
the Option. In the case of an Incentive Option, if the Participant owns
directly or by reason of the applicable attribution rules ten percent (10%) or
less of the total combined voting power of all classes of share capital of the
Company, the Option price per share of the Shares covered by each Incentive
Option shall be not less than the Fair Market Value of the Shares on the date of
the grant of the Incentive Option. In all other cases of Incentive Options, the
Option price shall be not less than one hundred ten percent (110%) of the Fair
Market Value on the date of grant.
B. Number of Shares
Each Option shall state the number of Shares to which it pertains.
C. Term of Option
Each Incentive Option shall terminate not more than ten (10) years from
the date of the grant thereof, or at such earlier time as the Award Agreement
may provide, and shall be subject to earlier termination as herein provided,
except that if the Option price is required under Paragraph A of this Article
VII to be at least one hundred ten percent (110%) of Fair Market Value, each
such Incentive Option shall terminate not more than five (5) years from the date
of the grant thereof, and shall be subject to earlier termination as herein
provided. The Committee shall determine the time at which a Nonstatutory Option
shall terminate.
-9-
<PAGE>
D. Date of Exercise
Upon the authorization of the grant of an Option, or at any time
thereafter, the Committee may, subject to the provisions of Paragraph C of this
Article VII, prescribe the date or dates on which the Option becomes
exercisable, and may provide that the Option become exercisable in installments
over a period of years, or upon the attainment of stated goals.
E. Medium of Payment
The Option price shall be payable upon the exercise of the Option, as set
forth in Paragraph I. It shall be payable in such form (permitted by Section
422 of the Code in the case of Incentive Options) as the Committee shall, either
by rules promulgated pursuant to the provisions of Article IV of the Plan, or in
the particular Award Agreement, provide.
F. Termination of Employment
1. A Participant who ceases to be an employee or Key
Non-Employee of the Company or of an Affiliate for any reason other than
death, Disability, or termination "for cause," as defined in subparagraph
(2) below, may exercise any Option granted to such Participant, to the
extent that the right to purchase Shares thereunder has become
exercisable on the date of such termination, but only within three (3)
months after such date, or, if earlier, within the originally prescribed
term of the Option. A Participant's employment shall not be deemed
terminated by reason of a transfer to another employer that is the
Company or an Affiliate.
2. A Participant who ceases to be an employee or Key
Non-Employee of the Company or of an Affiliate "for cause" shall, upon
such termination, cease to have any right to exercise any Option. For
purposes of this Plan, cause shall mean (i) a Participant's theft or
embezzlement, or attempted theft or embezzlement, of money or property of
the Company, a Participant's perpetration or attempted perpetration of
fraud, or a Participant's participation in a fraud or attempted fraud, on
the Company or a Participant's unauthorized appropriation of, or a
Participant's attempt to misappropriate, any tangible or intangible
assets or property of the Company; (ii) any act or acts of disloyalty,
dishonesty, misconduct, moral turpitude, or any other act or acts by a
Participant injurious to the interest, property, operations, business or
reputation of the Company; (iii) a Participant's commission of a felony
or any other crime the commission of which results in injury to the
Company; or (iv) any violation of any restriction on the disclosure or
use of confidential information of the Company or on competition with the
Company or any of its businesses as then conducted. The determination of
the Committee as to the existence of cause shall be conclusive and
binding upon the Participant and the Company.
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3. A Participant who is absent from work with the Company or
an Affiliate because of temporary disability (any disability other than a
Disability), or who is on leave of absence for any purpose permitted by
any authoritative interpretation (i.e., regulation, ruling, case law,
etc.) of Section 422 of the Code, shall not, during the period of any
such absence, be deemed, by virtue of such absence alone, to have
terminated his or her employment or relationship with the Company or with
an Affiliate, except as the Committee may otherwise expressly provide or
determine.
4. Paragraph F(1) shall control and fix the rights of a
Participant who ceases to be an employee or Key Non-Employee of the
Company or of an Affiliate for any reason other than Disability, death,
or termination "for cause," and who subsequently becomes Disabled or
dies. Nothing in Paragraphs G and H of this Article VII shall be
applicable in any such case except that, in the event of such a
subsequent Disability or death within the three (3) month period after
the termination of employment or, if earlier, within the originally
prescribed term of the Option, the Participant or the Participant's
estate or personal representative may exercise the Option permitted by
this Paragraph F within twelve (12) months after the date of Disability
or death of such Participant, but in no event beyond the originally
prescribed term of the Option.
G. Total and Permanent Disability
A Participant who ceases to be an employee or Key Non-Employee of the
Company or of an Affiliate by reason of Disability may exercise any Option
granted to such Participant (i) to the extent that the right to purchase Shares
thereunder has become exercisable on or before the date such Participant becomes
Disabled as determined by the Committee, and (ii) if the Option becomes
exercisable periodically, to the extent of any additional rights that would have
become exercisable had the Participant not become so Disabled until after the
close of business on the next periodic exercise date.
A Disabled Participant shall exercise such rights, if at all, only within
a period of not more than twelve (12) months after the date that the Participant
became Disabled as determined by the Committee (notwithstanding that the
Participant might have been able to exercise the Option as to some or all of the
Shares on a later date if the Participant had not become Disabled) or, if
earlier, within the originally prescribed term of the Option.
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H. Death
In the event that a Participant to whom an Option has been granted ceases
to be an employee or Key Non-Employee of the Company or of an Affiliate by
reason of such Participant's death, such Option, to the extent that the right is
exercisable but not exercised on the date of death, may be exercised by the
Participant's estate or personal representative within twelve (12) months after
the date of death of such Participant or, if earlier, within the originally
prescribed term of the Option, notwithstanding that the decedent might have been
able to exercise the Option as to some or all of the Shares on a later date if
the Participant were alive and had continued to be an employee or Key Non-
Employee of the Company or of an Affiliate.
I. Exercise of Option and Issuance of Stock
Options shall be exercised by giving written notice to the Company. Such
written notice shall: (i) be signed by the person exercising the Option, (ii)
state the number of Shares with respect to which the Option is being exercised,
(iii) contain the warranty required by paragraph M of this Article VII, if
applicable, and (iv) specify a date (other than a Saturday, Sunday or legal
holiday) not less than five (5) nor more than ten (10) days after the date of
such written notice, as the date on which the Shares will be purchased. Such
tender and conveyance shall take place at the principal office of the Company
during ordinary business hours, or at such other hour and place agreed upon by
the Company and the person or persons exercising the Option. On the date
specified in such written notice (which date may be extended by the Company in
order to comply with any law or regulation that requires the Company to take any
action with respect to the Option Shares prior to the issuance thereof), the
Company shall accept payment for the Option Shares in cash, by bank or certified
check, by wire transfer, or by such other means as may be approved by the
Committee and shall deliver to the person or persons exercising the Option in
exchange therefor an appropriate certificate or certificates for fully paid
nonassessable Shares or undertake to deliver certificates within a reasonable
period of time. In the event of any failure to take up and pay for the number
of Shares specified in such written notice on the date set forth therein (or on
the extended date as above provided), the right to exercise the Option shall
terminate with respect to such number of Shares, but shall continue with respect
to the remaining Shares covered by the Option and not yet acquired pursuant
thereto.
If approved in advance by the Committee, payment in full or in part also
may be made (i) by delivering Shares already owned by the Participant having a
total Fair Market Value on the date of such delivery equal to the Option price;
(ii) by the execution and delivery of a note or other evidence of indebtedness
(and any security agreement thereunder) satisfactory to the Committee; (iii) by
authorizing the Company to retain Shares that otherwise would be issuable upon
exercise of the Option having a total Fair Market Value on the date of delivery
equal to the Option price; (iv) by the delivery of cash or the extension of
credit by a broker-dealer to whom the Participant has submitted a notice of
exercise or otherwise indicated an intent to exercise an Option (in accordance
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with part 220, Chapter II, Title 12 of the Code of Federal Regulations, a
so-called "cashless" exercise); or (v) by any combination of the foregoing.
J. Rights as a Stockholder
No Participant to whom an Option has been granted shall have rights as a
stockholder with respect to any Shares covered by such Option except as to such
Shares as have been registered in the Company's share register in the name of
such Participant upon the due exercise of the Option and tender of the full
Option price.
K. Assignability and Transferability of Option
Unless otherwise permitted by the Code and by Rule 16b-3 of the Exchange
Act, if applicable, and approved in advance by the Committee, an Option granted
to a Participant shall not be transferable by the Participant and shall be
exercisable, during the Participant's lifetime, only by such Participant or, in
the event of the Participant's incapacity, his guardian or legal representative.
Except as otherwise permitted herein, such Option shall not be assigned,
pledged, or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment, or similar process and any
attempted transfer, assignment, pledge, hypothecation or other disposition of
any Option or of any rights granted thereunder contrary to the provisions of
this Paragraph K, or the levy of any attachment or similar process upon an
Option or such rights, shall be null and void.
L. Other Provisions
The Award Agreement for an Incentive Option shall contain such
limitations and restrictions upon the exercise of the Option as shall be
necessary in order that such Option can be an "incentive stock option" within
the meaning of Section 422 of the Code. Further, the Award Agreements
authorized under the Plan shall be subject to such other terms and conditions
including, without limitation, restrictions upon the exercise of the Option, as
the Committee shall deem advisable and which, in the case of Incentive Options,
are not inconsistent with the requirements of Section 422 of the Code.
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M. Purchase for Investment
If Shares to be issued upon the particular exercise of an Option shall
not have been effectively registered under the Securities Act of 1933, as now in
force or hereafter amended, the Company shall be under no obligation to issue
the Shares covered by such exercise unless and until the following conditions
have been fulfilled. The person who exercises such Option shall warrant to the
Company that, at the time of such exercise, such person is acquiring his or her
Option Shares for investment and not with a view to, or for sale in connection
with, the distribution of any such Shares, and shall make such other
representations, warranties, acknowledgements, and affirmations, if any, as the
Committee may require. In such event, the person acquiring such Shares shall be
bound by the provisions of the following legend (or similar legend) which shall
be endorsed upon the certificate(s) evidencing his or her Option Shares issued
pursuant to such exercise.
"The shares represented by this certificate have
been acquired for investment and they may not be
sold or otherwise transferred by any person,
including a pledgee, in the absence of an effective
registration statement for the shares under the
Securities Act of 1933 or an opinion of counsel
satisfactory to the Company that an exemption from
registration is then available."
"The shares of stock represented by this
certificate are subject to all of the terms and
conditions of a certain Stockholders' Agreement
dated as of _________________, 199__, among the
Company and certain of its stockholders. A copy of
the Agreement is on file in the office of the
Secretary of the Company. The Agreement provides,
among other things, for restrictions upon the
holder's right to transfer the shares represented
hereby, and for certain prior rights to purchase
and certain obligations to sell the shares of
common stock evidenced by this certificate at a
designated purchase price determined in accordance
with certain procedures. Any attempted transfer of
these shares other than in compliance with the
Agreement shall be void and of no effect. By
accepting the shares of stock evidenced by this
certificate, any permitted transferee agrees to be
bound by all of the terms and conditions of said
Agreement."
Without limiting the generality of the foregoing, the Company may delay issuance
of the Shares until completion of any action or obtaining any consent that the
Company deems necessary under any applicable law (including without limitation
state securities or "blue sky" laws).
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VIII. FORMULA OPTIONS
A. Each Non-Employee Board Member shall be granted automatically a Formula
Option to purchase nine thousand (9,000) Shares upon his or her initial election
and qualification for a three (3) year term as a Non-Employee Board Member, and,
thereafter, shall be granted automatically a Formula Option to purchase nine
thousand (9,000) Shares upon each re-election and qualification as a Non-
Employee Board Member. The foregoing notwithstanding, and in lieu thereof, each
Non-Employee Board Member whose election is for a term of less than three (3)
years shall be granted automatically a Formula Option to purchase three thousand
(3,000) Shares for each year of his or her term.
B. The purchase price of the Shares subject to the Formula Option shall be
equal to one hundred percent (100%) of the Fair Market Value as of the date of
grant.
C. The Shares subject to the Formula Option granted to a Non-Employee Board
Member shall become exercisable cumulatively, in accordance with the following
schedule:
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<TABLE>
<CAPTION>
Cumulative Number of Shares
Years Elapsed Since for Which Formula Option
Date of Grant May be Exercised
------------------- ---------------------------
<S> <C> <C>
Less than 1 0
1 3,000
2 6,000
3 or more 9,000
</TABLE>
The foregoing schedule notwithstanding, if a Non-Employee Board Member shall
cease to be a director of the Company because of death or Disability, all Shares
for which a Formula Option has been granted shall become immediately exercisable
and shall be exercisable in accordance with Paragraphs G and H of Article VII.
If a Non-Employee Board Member ceases to be a director of the Company for any
reason other than death or Disability, his or her right to exercise the Formula
Option, and the timing of such exercise, shall be governed by the applicable
provisions of Paragraph F of Article VII.
D. Formula Options shall be evidenced by an Award Agreement which shall
conform to the requirements of the Plan, and may contain such other provisions
not inconsistent therewith, as the Committee shall deem advisable. The
provisions of Article VII governing Nonstatutory Options, and the exercise and
issuance thereof, shall apply to Formula Options to the extent such provisions
are not inconsistent with this Article VIII.
IX. REQUIRED TERMS AND CONDITIONS OF RESTRICTED STOCK
A. The Committee may from time to time grant an Award in Shares of Common
Stock or grant an Award denominated in units of Common Stock, for such
consideration, if any, as the Committee deems appropriate (which amount may be
less than the Fair Market Value of the Common Stock on the date of the Award),
and subject to such restrictions and conditions and other terms as the Committee
may determine at the time of the Award (including, but not limited to,
continuous service with the Company or its Affiliates, achievement of specific
business objectives, increases in specified indices, attaining growth rates, and
other measurements of Company or Affiliate performance), and subject further to
the general provisions of the Plan, the applicable Award Agreement, and the
following specific rules.
B. If Shares of Restricted Stock are awarded, such Shares cannot be
assigned, sold, transferred, pledged, or hypothecated prior to the lapse of the
restrictions applicable thereto, and, in no event, prior to six (6) months from
the date of the Award. The Company shall issue, in the name of the Participant,
stock certificates representing the total number of Shares of Restricted Stock
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awarded to the Participant, as soon as may be reasonably practicable after the
grant of the Award, which certificates shall be held by the Secretary of the
Company as provided in Paragraph G.
C. Restricted Stock issued to a Participant under the Plan shall be
governed by an Award Agreement that shall specify whether Shares of Common Stock
are awarded to the Participant, or whether the Award shall be one not of Shares
of Common Stock but one denominated in units of Common Stock, any consideration
required thereto, and such other provisions as the Committee shall determine .
D. Subject to the provisions of Paragraphs B and E hereof and the
restrictions set forth in the related Award Agreement, the Participant receiving
an Award of Shares of Restricted Stock shall thereupon be a stockholder with
respect to all of the Shares represented by such certificate or certificates and
shall have the rights of a stockholder with respect to such Shares, including
the right to vote such Shares and to receive dividends and other distributions
made with respect to such Shares. All Common Stock received by a Participant as
the result of any dividend on the Shares of Restricted Stock, or as the result
of any stock split, stock distribution, or combination of the Shares affecting
Restricted Stock, shall be subject to the restrictions set forth in the related
Award Agreement.
E. Restricted Stock awarded to a Participant pursuant to the Plan will be
forfeited, and any Shares of Restricted Stock or units of Restricted Stock sold
to a Participant pursuant to the Plan may, at the Company's option, be resold to
the Company for an amount equal to the price paid therefor, and in either case,
such Restricted Stock shall revert to the Company, if the Company so determines
in accordance with Article XIV or any other condition set forth in the Award
Agreement, or, alternatively, if the Participant's employment with the Company
or its Affiliates terminates, other than for reasons set forth in Article XIII,
prior to the expiration of the forfeiture or restriction provisions set forth in
the Award Agreement.
F. The Committee, in its discretion, shall have the power to accelerate the
date on which the restrictions contained in the Award Agreement shall lapse with
respect to any or all Restricted Stock awarded under the Plan.
G. The Secretary of the Company shall hold the certificate or certificates
representing Shares of Restricted Stock issued under the Plan, properly endorsed
for transfer, on behalf of each Participant who holds such Shares, until such
time as the Shares of Restricted Stock are forfeited, resold to the Company, or
the restrictions lapse. Any Restricted Stock denominated in units of Common
Stock, if not previously forfeited, shall be payable in accordance with Article
XV as soon as practicable after the restrictions lapse.
H. The Committee may prescribe such other restrictions, conditions, and
terms applicable to Restricted Stock issued to a Participant under the Plan that
are neither inconsistent
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with nor prohibited by the Plan or the Award Agreement, including, without
limitation, terms providing for a lapse of the restrictions of this Article or
any Award Agreement in installments.
X. REQUIRED TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS
If deemed by the Committee to be in the best interests of the Company, a
Participant may be granted a Right. Each Right shall be granted subject to such
restrictions and conditions and other terms as the Committee may specify in the
Award Agreement at the time the Right is granted, subject to the general
provisions of the Plan, and the following specific rules.
A. Rights may be granted, if at all, either singly, in combination with
another Award, or in tandem with another Award. At the time of grant of a Right,
the Committee shall specify the base price of Common Stock to be used in
connection with the calculation described in Paragraph B below, provided that
the base price shall not be less than one hundred percent (100%) of the Fair
Market Value of a Share of Common Stock on the date of grant, unless approved by
the Board.
B. Upon exercise of a Right, which shall be not less than six (6) months
from the date of the grant, the Participant shall be entitled to receive in
accordance with Article XV, and as soon as practicable, the excess of the Fair
Market Value of one Share of Common Stock on the date of exercise over the base
price specified in such Right, multiplied by the number of Shares of Common
Stock then subject to the Right, or the portion thereof being exercised.
C. Notwithstanding anything herein to the contrary, if the Award granted to
a Participant allows him or her to elect to cancel all or any portion of an
unexercised Option by exercising an additional or tandem Right, then the Option
price per Share of Common Stock shall be used as the base price specified in
Paragraph A to determine the value of the Right upon such exercise and, in the
event of the exercise of such Right, the Company's obligation with respect to
such Option or portion thereof shall be discharged by payment of the Right so
exercised. In the event of such a cancellation, the number of Shares as to which
such Option was canceled shall become available for use under the Plan, less the
number of Shares, if any, received by the Participant upon such cancellation in
accordance with Article XV.
D. A Right may be exercised only by the Participant (or, if applicable
under Article XIII, by a legatee or legatees of such Right, or by the
Participant's executors, personal representatives, or distributees).
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XI. PERFORMANCE AWARDS
A. A Participant may be granted an Award that is subject to
performance conditions specified by the Committee. The Committee may use
business criteria and other measures of performance it deems appropriate in
establishing any performance conditions (including, but not limited to,
continuous service with the Company or its Affiliates, achievement of specific
business objectives, increases in specified indices, attaining growth rates, and
other measurements of Company or Affiliate performance), and may exercise its
discretion to reduce or increase the amounts payable under any Award subject to
performance conditions, except as otherwise limited under Paragraphs C and D,
below, in the case of a Performance Award intended to qualify under Code Section
162(m).
B. Any Performance Award will be forfeited if the Company so
determines in accordance with Article XIV or any other condition set forth in
the Award Agreement, or, alternatively, if the Participant's employment with the
Company or its Affiliates terminates, other than for reasons set forth in
Article XIII, prior to the expiration of the time period over which the
performance conditions are to be measured.
C. If the Committee determines that a Performance Award to be
granted to a Key Employee should qualify as "performance-based compensation" for
purposes of Code Section 162(m), the grant and/or settlement of such Performance
Award shall be contingent upon achievement of preestablished performance goals
and other terms set forth in this Paragraph C.
1. Performance Goals Generally. The performance goals for such
Performance Awards shall consist of one or more business criteria and
a targeted level or levels of performance with respect to such
criteria, as specified by the Committee consistent with this Paragraph
C. Performance goals shall be objective and shall otherwise meet the
requirements of Code Section 162(m), including the requirement that
the level or levels of performance targeted by the Committee result in
the performance goals being "substantially uncertain." The Committee
may determine that more than one performance goal must be achieved as
a condition to settlement of such Performance Awards. Performance
goals may differ for Performance Awards granted to any one Participant
or to different Participants.
2. Business Criteria. One or more of the following business
criteria for the Company, on a consolidated basis, and/or for
specified Affiliates or business units of the Company (except with
respect to the total stockholder return and earnings per share
criteria), shall be used exclusively by the Committee in establishing
performance goals for such Performance Awards: (1) total stockholder
return; (2) such total stockholder return as compared to the total
return (on a comparable basis) of a publicly available index such as,
but not limited to, the Standard & Poor's 500 or the Nasdaq-U.S.
Index;
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(3) net income; (4) pre-tax earnings; (5) EBITDA; (6) pre-tax
operating earnings after interest expense and before bonuses, service
fees, and extraordinary or special items; (7) operating margin; (8)
earnings per share; (9) return on equity; (10) return on capital; (11)
return on investment; (12) operating income, excluding the effect of
charges for acquired in-process technology and before payment of
executive bonuses; (13) earnings per share, excluding the effect of
charges for acquired in-process technology and before payment of
executive bonuses; (14) working capital; and (15) total revenues. The
foregoing business criteria also may be used in establishing
performance goals for Cash Awards granted under Article XII hereof.
3. Compensation Limitation. No Key Employee may receive a
Performance Award in excess of $2,400,000 for any three (3) year
period.
D. Achievement of performance goals in respect of such Performance
Awards shall be measured over such periods as may be specified by the Committee.
Performance goals shall be established on or before the dates that are required
or permitted for "performance-based compensation" under Code Section 162(m).
E. Settlement of Performance Awards may be in cash or Shares, or
other property, in the discretion of the Committee. The Committee may, in its
discretion, reduce the amount of a settlement otherwise to be made in connection
with such Performance Awards, but may not exercise discretion to increase any
such amount payable in respect of a Performance Award subject to Code Section
162(m).
XII. REQUIRED TERMS AND CONDITIONS OF CASH AWARDS
A. The Committee may from time to time authorize the award of cash
payments under the Plan to Participants, subject to such restrictions and
conditions and other terms as the Committee may determine at the time of
authorization (including, but not limited to, continuous service with the
Company or its Affiliates, achievement of specific business objectives,
increases in specified indices, attaining growth rates, and other measurements
of Company or Affiliate performance), and subject to the general provisions of
the Plan, the applicable Award Agreement, and the following specific rules.
B. Any Cash Award will be forfeited if Company so determines in
accordance with Article XIV or any other condition set forth in the Award
Agreement, or, alternatively, if the Participant's employment with the Company
or its Affiliates terminates, other than for reasons set forth in Article XIII,
prior to the attainment of any goals set forth in the Award Agreement or prior
to the expiration of the forfeiture or restriction provisions set forth in the
Award Agreement, whichever is applicable.
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C. The Committee, in its discretion, shall have the power to change
the date on which the restrictions contained in the Award Agreement shall lapse,
or the date on which goals are to be measured, with respect to any Cash Award.
D. Any Cash Award, if not previously forfeited, shall be payable in
accordance with Article XV as soon as practicable after the restrictions lapse
or the goals are attained.
E. The Committee may prescribe such other restrictions, conditions,
and terms applicable to the Cash Awards issued to a Participant under the Plan
that are neither inconsistent with nor prohibited by the Plan or the Award
Agreement, including, without limitation, terms providing for a lapse of the
restrictions, or a measurement of the goals, in installments.
XIII. TERMINATION OF EMPLOYMENT TERMINATION OF EMPLOYMENT
Except as may otherwise be (i) provided in Article VII for Options,
(ii) provided for under the Award Agreement, or (iii) permitted pursuant to
Paragraphs A through C of this Article XIII (subject to the limitations under
the Code for Incentive Options), if the employment of a Participant terminates,
all unexpired, unpaid, unexercised, or deferred Awards shall be canceled
immediately.
A. Retirement under a Company Affiliate Retirement Plan or When a
Participant's employment terminates as a result of retirement as defined under a
Company or Affiliate retirement plan, the Committee may permit Awards to
continue in effect beyond the date of retirement in accordance with the
applicable Award Agreement, and/or the exercisability and vesting of any Award
may be accelerated.
B. Resignation in the Best Resignation Interests of the Company or an
Affiliate. When a Participant resigns from the Company or an Affiliate and, in
the judgment of the chief executive officer or other senior officer designated
by the Committee, the acceleration and/or continuation of outstanding Awards
would be in the best interests of the Company, the Committee may (i) authorize,
where appropriate, the acceleration and/or continuation of all or any part of
Awards granted prior to such termination and (ii) permit the exercise, vesting,
and payment of such Awards for such period as may be set forth in the applicable
Award Agreement, subject to earlier cancellation pursuant to Article XIV or at
such time as the Committee shall deem the continuation of all or any part of the
Participant's Awards are not in the Company's or its Affiliate's best interests.
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C. Death or Disability of Participant
1. In the event of a Participant's death, the Participant's
estate or beneficiaries shall have a period up to the earlier of (i)
the expiration date specified in the Award Agreement, or (ii) the
expiration date specified in Paragraph H of Article VII, within which
to receive or exercise any outstanding Awards held by the Participant
under such terms as may be specified in the applicable Award
Agreement. Rights to any such outstanding Awards shall pass by will or
the laws of descent and distribution in the following order: (a) to
beneficiaries so designated by the Participant; (b) to a legal
representative of the Participant; or (c) to the persons entitled
thereto as determined by a court of competent jurisdiction. Awards so
passing shall be made at such times and in such manner as if the
Participant were living.
2. In the event a Participant is determined by the Company to
be Disabled, and subject to the limitations of Paragraph G of Article
VII, Awards may be paid to, or exercised by, the Participant, if
legally competent, or by a legally designated guardian or other
representative if the Participant is legally incompetent by virtue of
such Disability.
3. After the death or Disability of a Participant, the
Committee may in its sole discretion at any time (i) terminate
restrictions in Award Agreements; (ii) accelerate any or all
installments and rights; and/or (iii) instruct the Company to pay the
total of any accelerated payments in a lump sum to the Participant,
the Participant's estate, beneficiaries or representative,
notwithstanding that, in the absence of such termination of
restrictions or acceleration of payments, any or all of the payments
due under the Awards ultimately might have become payable to other
beneficiaries.
XIV. CANCELLATION AND RESCISSION OF AWARDS
Unless the Award Agreement specifies otherwise, the Committee may
cancel any unexpired, unpaid, unexercised, or deferred Awards at any time if the
Participant is not in compliance with the applicable provisions of the Award
Agreement, the Plan, or with the following conditions:
A. A Participant shall not breach any protective agreement entered
into between him or her and the Company or any Affiliates, or render services
for any organization or engage directly or indirectly in any business which, in
the judgment of the chief executive officer of the Company or other senior
officer designated by the Committee, is or becomes competitive with the Company,
or which organization or business, or the rendering of services to such
organization or business, is or becomes otherwise prejudicial to or in conflict
with the interests of the Company. For a Participant whose employment has
terminated, the judgment of the chief executive officer shall be
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based on terms of the protective agreement, if applicable, or on the
Participant's position and responsibilities while employed by the Company or its
Affiliates, the Participant's post-employment responsibilities and position with
the other organization or business, the extent of past, current, and potential
competition or conflict between the Company and other organization or business,
the effect of the Participant's assuming the post-employment position on the
Company's or its Affiliate's customers, suppliers, investors, and competitors,
and such other considerations as are deemed relevant given the applicable facts
and circumstances. A Participant may, however, purchase as an investment or
otherwise, stock or other securities of any organization or business so long as
they are listed upon a recognized securities exchange or traded over-the-
counter, and such investment does not represent a substantial investment to the
Participant or a greater than one percent (1%) equity interest in the
organization or business.
B. A Participant shall not, without prior written authorization from
the Company, disclose to anyone outside the Company or its Affiliates, or use in
other than the Company's or Affiliate's business, any confidential information
or materials relating to the business of the Company or its Affiliates, acquired
by the Participant either during or after employment with the Company or its
Affiliates.
C. A Participant shall disclose promptly and assign to the Company
all right, title, and interest in any invention or idea, patentable or not, made
or conceived by the Participant during employment with the Company or an
Affiliate, relating in any manner to the actual or anticipated business,
research, or development work of the Company or its Affiliates, and shall do
anything reasonably necessary to enable the Company or its Affiliates to secure
a patent, trademark, copyright, or other protectable interest where appropriate
in the United States and in foreign countries.
Upon exercise, payment, or delivery pursuant to an Award, the Participant shall
certify on a form acceptable to the Committee that he or she is in compliance
with the terms and conditions of the Plan, including the provisions of
Paragraphs A, B or C of this Article XIV. Failure to comply with the provisions
of Paragraphs A, B or C of this Article XIV prior to, or during the one (1) year
period after, any exercise, payment, or delivery pursuant to an Award shall
cause such exercise, payment, or delivery to be rescinded. The Company shall
notify the Participant in writing of any such rescission within two (2) years
after such exercise, payment, or delivery. Within ten (10) days after receiving
such a notice from the Company, the Participant shall pay to the Company the
amount of any gain realized or payment received as a result of the rescinded
exercise, payment, or delivery pursuant to the Award. Such payment shall be made
either in cash or by returning to the Company the number of Shares of Common
Stock that the Participant received in connection with the rescinded exercise,
payment, or delivery.
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XV. PAYMENT OF RESTRICTED STOCK, RIGHTS, PERFORMANCE AWARDS AND CASH
AWARDS
Payment of Restricted Stock, Rights, Performance Awards and Cash Awards
may be made, as the Committee shall specify, in the form of cash, Shares of
Common Stock, or combinations thereof; provided, however, that a fractional
Share of Common Stock shall be paid in cash equal to the Fair Market Value of
the fractional Share of Common Stock at the time of payment.
XVI. WITHHOLDING WITHHOLDING
Except as otherwise provided by the Committee,
A. The Company shall have the power and right to deduct or withhold,
or require a Participant to remit to the Company, an amount sufficient to
satisfy federal, state, and local taxes required by law to be withheld with
respect to any grant, exercise, or payment made under or as a result of this
Plan; and
B. In the case of payments of Awards, or upon any other taxable
event hereunder, a Participant may elect, subject to the approval in advance by
the Committee, to satisfy the withholding requirement, if any, in whole or in
part, by having the Company withhold Shares of Common Stock that would otherwise
be transferred to the Participant having a Fair Market Value, on the date the
tax is to be determined, equal to the minimum marginal tax that could be imposed
on the transaction. All elections shall be made in writing and signed by the
Participant.
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XVII. SAVINGS CLAUSE
This Plan is intended to comply in all respects with applicable law
and regulations, including, (i) with respect to those Participants who are
officers or directors for purposes of Section 16 of the Exchange Act, Rule 16b-3
of the Securities and Exchange Commission, if applicable, and (ii) with respect
to executive officers, Code Section 162(m). In case any one or more provisions
of this Plan shall be held invalid, illegal, or unenforceable in any respect
under applicable law and regulation (including Rule 16b-3 and Code Section
162(m)), the validity, legality, and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby and the invalid, illegal,
or unenforceable provision shall be deemed null and void; however, to the extent
permitted by law, any provision that could be deemed null and void shall first
be construed, interpreted, or revised retroactively to permit this Plan to be
construed in compliance with all applicable law (including Rule 16b-3 and Code
Section 162(m)) so as to foster the intent of this Plan. Notwithstanding
anything herein to the contrary, with respect to Participants who are officers
and directors for purposes of Section 16 of the Exchange Act, if applicable, and
if required to comply with rules promulgated thereunder, no grant of, or Option
to purchase, Shares shall permit unrestricted ownership of Shares by the
Participant for at least six (6) months from the date of grant or Option, unless
the Board determines that the grant of, or Option to purchase, Shares otherwise
satisfies the then current Rule 16b-3 requirements.
XVIII. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; CORPORATE TRANSACTIONS
In the event that the outstanding Shares of the Company are changed
into or exchanged for a different number or kind of shares or other securities
of the Company or of another corporation by reason of any reorganization,
merger, consolidation, recapitalization, reclassification, change in par value,
stock split-up, combination of shares or dividends payable in capital stock, or
the like, appropriate adjustments to prevent dilution or enlargement of the
Awards granted to, or available for, Participants shall be made in the manner
and kind of Shares for the purchase of which Awards may be granted under the
Plan, and, in addition, appropriate adjustment shall be made in the number and
kind of Shares and in the Option price per share subject to outstanding Options.
The foregoing notwithstanding, no such adjustment shall be made in an Incentive
Option which shall, within the meaning of Section 424 of the Code, constitute
such a modification, extension, or renewal of an Option as to cause it to be
considered as the grant of a new Option.
Notwithstanding anything herein to the contrary, the Company may, in
its sole discretion, accelerate the timing of the exercise provisions of any
Award in the event of a tender offer for the Company's Shares, the adoption of a
plan of merger or consolidation under which a majority of the Shares of the
Company would be eliminated, or a sale of all or any portion of the Company's
assets or capital stock. Alternatively, the Company may, in its sole discretion,
cancel
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any or all Awards upon any of the foregoing events and provide for the payment
to Participants in cash of an amount equal to the value or appreciated value,
whichever is applicable, of the Award, as determined in good faith by the
Committee, at the close of business on the date of such event. The preceding two
sentences of this Article XVIII notwithstanding, the Company shall be required
to accelerate the timing of the exercise provisions of any Award if (i) any such
business combination is to be accounted for as a pooling-of-interests under APB
Opinion 16 and (ii) the timing of such acceleration does not prevent such
pooling-of-interests treatment.
Upon a business combination by the Company or any of its Affiliates
with any corporation or other entity through the adoption of a plan of merger or
consolidation or a share exchange or through the purchase of all or
substantially all of the capital stock or assets of such other corporation or
entity, the Board or the Committee may, in its sole discretion, grant Options
pursuant hereto to all or any persons who, on the effective date of such
transaction, hold outstanding options to purchase securities of such other
corporation or entity and who, on and after the effective date of such
transaction, will become employees or directors of, or consultants or advisors
to, the Company or its Affiliates. The number of Shares subject to such
substitute Options shall be determined in accordance with the terms of the
transaction by which the business combination is effected. Notwithstanding the
other provisions of this Plan, the other terms of such substitute Options shall
be substantially the same as or economically equivalent to the terms of the
options for which such Options are substituted, all as determined by the Board
or by the Committee, as the case may be. Upon the grant of substitute Options
pursuant hereto, the options to purchase securities of such other corporation or
entity for which such Options are substituted shall be cancelled immediately.
XIX. DISSOLUTION OR LIQUIDATION OF THE COMPANY
Upon the dissolution or liquidation of the Company other than in
connection with a transaction to which Article XVIII is applicable, all Awards
granted hereunder shall terminate and become null and void; provided, however,
that if the rights of a Participant under the applicable Award have not
otherwise terminated and expired, the Participant may, if the Committee, in its
sole discretion, so permits, have the right immediately prior to such
dissolution or liquidation to exercise any Award granted hereunder to the extent
that the right thereunder has become exercisable as of the date immediately
prior to such dissolution or liquidation.
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XX. TERMINATION OF THE PLAN
The Plan shall terminate (10) years from the earlier of the date of
its adoption by the Board or the date of its approval by the stockholders. The
Plan may be terminated at an earlier date by vote of the stockholders or the
Board; provided, however, that any such earlier termination shall not affect any
Award Agreements executed prior to the effective date of such termination.
Notwithstanding anything in this Plan to the contrary, any Options granted prior
to the effective date of the Plan's termination may be exercised until the
earlier of (i) the date set forth in the Award Agreement, or (ii) in the case of
an Incentive Option, ten (10) years from the date the Option is granted; and the
provisions of the Plan with respect to the full and final authority of the
Committee under the Plan shall continue to control.
XXI. AMENDMENT OF THE PLAN
The Plan may be amended by the Board and such amendment shall become
effective upon adoption by the Board; provided, however, that any amendment that
(i) increases the numbers of Shares that may be granted under this Plan, other
than as provided by Article XVIII, (ii) materially modifies the requirements as
to eligibility to participate in the Plan, (iii) materially increases the
benefits to Participants, (iv) extends the period during which Incentive Options
may be granted or exercised, or (v) changes the designation of the class of
employees eligible to receive Incentive Options, or otherwise causes the
Incentive Options to no longer qualify as "incentive stock options" as defined
in Section 422 of the Code, also shall be subject to the approval of the
stockholders of the Company within one (1) year either before or after such
adoption by the Board, subject to the requirements of Article XVII of the Plan.
XXII. EMPLOYMENT RELATIONSHIP
Nothing herein contained shall be deemed to prevent the Company or an
Affiliate from terminating the employment of a Participant, nor to prevent a
Participant from terminating the Participant's employment with the Company or an
Affiliate.
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XXIII. INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification as they may have
as directors or as members of the Committee, the members of the Committee shall
be indemnified by the Company against all reasonable expenses, including
attorneys' fees, actually and reasonably incurred in connection with the defense
of any action, suit or proceeding, or in connection with any appeal therein, to
which they or any of them may be a party by reason of any action taken by them
as directors or members of the Committee and against all amounts paid by them in
settlement thereof (provided such settlement is approved by the Board) or paid
by them in satisfaction of a judgment in any such action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in such action,
suit or proceeding that the director or Committee member is liable for gross
negligence or willful misconduct in the performance of his or her duties. To
receive such indemnification, a director or Committee member must first offer in
writing to the Company the opportunity, at its own expense, to defend any such
action, suit or proceeding.
XXIV. UNFUNDED PLAN
Insofar as it provides for payments in cash in accordance with Article
XV, or otherwise, the Plan shall be unfunded. Although bookkeeping accounts may
be established with respect to Participants who are entitled to cash, Common
Stock, or rights thereto under the Plan, any such accounts shall be used merely
as a bookkeeping convenience. The Company shall not be required to segregate any
assets that may at any time be represented by cash, Common Stock, or rights
thereto, nor shall the Plan be construed as providing for such segregation, nor
shall the Company, the Board, or the Committee be deemed to be a trustee of any
cash, Common Stock, or rights thereto to be granted under the Plan. Any
liability of the Company to any Participant with respect to a grant of cash,
Common Stock, or rights thereto under the Plan shall be based solely upon any
contractual obligations that may be created by the Plan and any Award Agreement;
no such obligation of the Company shall be deemed to be secured by any pledge or
other encumbrance on any property of the Company. Neither the Company nor the
Board nor the Committee shall be required to give any security or bond for the
performance of any obligation that may be created by the Plan.
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XXV. MITIGATION OF EXCISE TAX
If any payment or right accruing to a Participant under this Plan
(without the application of this Article XXV), either alone or together with
other payments or rights accruing to the Participant from the Company or an
Affiliate, would constitute a "parachute payment" (as defined in Section 280G of
the Code and regulations thereunder), such payment or right shall be reduced to
the largest amount or greatest right that will result in no portion of the
amount payable or right accruing under the Plan being subject to an excise tax
under Section 4999 of the Code or being disallowed as a deduction under Section
280G of the Code. The determination of whether any reduction in the rights or
payments under this Plan is to apply shall be made by the Company. The
Participant shall cooperate in good faith with the Company in making such
determination and providing any necessary information for this purpose.
XXVI. EFFECTIVE DATE
This Plan shall become effective upon adoption by the Board, provided
that the Plan is approved by the stockholders of the Company before or at the
Company's next annual meeting, but in no event shall stockholder approval be
sought more than one (1) year after such adoption by the Board.
XXVII. GOVERNING LAW
This Plan shall be governed by the laws of the State of Illinois and
construed in accordance therewith.
Adopted this 30th day of June, 1996.
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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.
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SECOND AMENDMENT TO
THE METZLER GROUP, INC. LONG-TERM INCENTIVE PLAN
The Metzler Group, Inc. Long-Term Incentive Plan, as amended, shall be
amended, effective May 1, 1998, as follows:
Article III ("Shares Subject to the Plan") shall be amended by
deleting such Article in its entirety and replacing it with the following:
III. SHARES SUBJECT TO THE PLAN
The aggregate number of Shares as to which Awards may be granted from
time to time shall be 25% of the issued and outstanding shares of capital stock
of the Company from time to time outstanding; provided that no change in the
issued and outstanding capital stock shall cause the number of Shares as to
which Awards may be granted to decrease; provided, further, that no more than
5,500,000 Shares (as adjusted for stock splits, stock dividends and other
similar events) shall be available for the grant of Incentive Options hereunder.
In accordance with Code Section 162(m), if applicable, the aggregate
number of Shares as to which Awards may be granted in any one calendar year to
any one Key Employee shall not exceed three hundred thousand (300,000) Shares
(subject to adjustment for stock splits, stock dividends, and other adjustments
described in Article XVIII hereof).
From time to time, the Committee and appropriate officers of the
Company shall take whatever actions are necessary to file required documents
with governmental authorities and stock exchanges so as to make Shares available
for issuance pursuant to the Plan. Shares subject to Awards that are exercised,
are forfeited, terminated, expire unexercised, canceled by agreement of the
Company and the Participant, settled in cash in lieu of Common Stock or in such
manner that all or some of the Shares covered by such Awards are not issued to a
Participant, or are exchanged for Awards that do not involve Common Stock, shall
immediately become available for Awards. Awards payable in cash shall not reduce
the number of Shares available for Awards under the Plan.
Except as otherwise set forth herein, the aggregate number of Shares
as to which Awards may be granted shall be subject to change only by means of an
amendment of the Plan duly adopted by the Company and approved by the
stockholders of the Company within one year before or after the date of the
adoption of the amendment.
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<PAGE>
Exhibit 5
[LETTERHEAD OF SACHNOFF & WEAVER, LTD.]
March 31, 1999
The Metzler Group, Inc.
615 North Wabash Avenue
Chicago, IL 60611
Re: Post Effective Amendment to Registration Statement on Form S-8
Gentlemen:
We have acted as counsel for The Metzler Group, Inc. (the "Company") in
connection with the preparation and filing of Post Effective Amendment No. 1 to
the Registration Statement on Form S-8 (the "Registration Statement") filed by
the Company with the Securities and Exchange Commission to effect the
registration, pursuant to the Securities Act of 1933, of 4,200,000 shares of
common stock, $0.01 par value (the "Common Stock"), which may be offered by the
Company under its Long-Term Incentive Plan.
In connection with this opinion, we have relied as to matters of fact,
without investigation, upon certificates of public officials and others and upon
affidavits, certificates and statements of directors, officers and employees of,
and the accountants for, the Company. We also have examined originals or copies,
certified or otherwise identified to our satisfaction, of such corporate and
other instruments, documents and records as we have deemed relevant and
necessary to examine for the purpose of this opinion, including the Plan. In
addition, we have reviewed such questions of law as we have considered necessary
and appropriate for the purposes of this opinion.
We have assumed the accuracy and completeness of all documents and records
that we have reviewed, the genuineness of all signatures, the due authority of
the parties signing such documents, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all the documents
submitted to us as certified or photostatic copies and the authenticity of the
originals of such latter documents.
<PAGE>
The Metzler Group, Inc.
March 31, 1999
Page 2
Based upon and subject to the foregoing, we advise you that, in our
opinion, the shares of Common Stock proposed to be offered by the Company as set
forth in the Registration Statement have been duly authorized and, when issued
and sold as set forth in the Registration Statement, and in accordance with The
Metzler Group, Inc. Long-Term Incentive Plan referred to in the Registration
Statement, such shares will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
above-referenced Registration Statement. In giving this consent, we do not
hereby admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act of 1933 or the rules and regulations of
the Securities and Exchange Commission.
We express no opinions as to matters under or involving any laws other than
the laws of the State of Illinois, the federal laws of the United States of
America, and the General Corporation Law of the State of Delaware.
Very truly yours,
/s/ Sachnoff & Weaver, Ltd.
---------------------------------
SACHNOFF & WEAVER, LTD.
2
<PAGE>
EXHIBIT 23
Consent of KPMG Peat Marwick LLP
--------------------------------
The Board of Directors
The Metzler Group, Inc.
We consent to the incorporation by reference in the registration statement (No.
333-30267) on Form S-8 related to the Long-Term Incentive Plan of The Metzler
Group, Inc. of our report dated November 6, 1998, relating to the consolidated
balance sheets of The Metzler Group, Inc. and subsidiaries as of December 31,
1997 and 1996, and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the years for the three-year
period ended December 31, 1997, which report appears in the Form 8-K/A of The
Metzler Group, Inc.
/s/ KPMG Peat Marwick LLP
---------------------------------------
Chicago, Illinois
March 24, 1999
