<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No. 0-28830
The Metzler Group, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 36-4094854
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
615 North Wabash Avenue, Chicago, Illinois 60611
(Address of principal executive offices, including zip code)
(312) 573-5600
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.001 per share
(Title of Class)
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [_]
<PAGE>
As of March 31, 1999, 42,118,124 shares of the Registrant's common stock,
par value $0.001 per share ("Common Stock"), were outstanding. The aggregate
market value of shares of Common Stock held by non-affiliates, based upon the
closing sale price of the stock on the Nasdaq National Market on March 31, 1999,
was approximately $1,299,320,000.
PART III
The information set forth below was not included in the Registrant's Form
10-K filed on March 31, 1999. Such information is being provided in this
amendment in accordance with General Instruction G(3) to Form 10-K.
Item 10--Directors and Executive Officers of the Registrant.
Robert P. Maher, 49, has served as one of our directors since April 1991.
He has served as Chief Executive Officer and President since January 1996 and as
Chairman of the Board since June 1996. From August 1990 to December 1995, Mr.
Maher held various positions with us and our affiliates, most recently as a
Senior Vice President of Metzler & Associates, Inc. working primarily in the
information technology area. From 1988 to August 1990, he organized and directed
information technology engagements for the regulated segment of the
communications industry practice as a principal with the consulting practice of
Ernst & Young LLP.
James F. Hillman, 41, joined us in April 1996 and has served as our Chief
Financial Officer and Treasurer since June 1996. From July 1988 to March 1996,
he was employed by Ameritech Corporation, most recently as the Chief Financial
Officer of Ameritech Monitoring Services, Inc.
Barry S. Cain, 56, has served as our Vice President and Chief
Administrative Officer since September 1997 and as a director since May 1998.
Mr. Cain joined us from his position as a member of the law firm of Sachnoff &
Weaver, Ltd., where he was co-chairman of the firm's Business Group and a member
of its board of directors. Prior to joining us, Mr. Cain served as our outside
general counsel since inception.
Stephen J. Denari, 46, has served as our Vice President--Corporate
Development since July 1997. Prior to joining us, Mr. Denari served as a turn-
around specialist for a variety of companies, including Harley Davidson, DBMS,
Inc., American Capital Enterprises, and First National Entertainment. Mr. Denari
has also assisted us since 1990 in various specialized projects for our clients.
Charles A. Demirjian, 34, has served as our General Counsel, Vice President
and Secretary since September 1997. Mr. Demirjian joined us from his position as
a member of the law firm of Sachnoff & Weaver, Ltd. Prior to joining Sachnoff &
Weaver, Ltd. in March 1996, Mr. Demirjian was an associate with the law firm of
Neal Gerber & Eisenberg.
Peter B. Pond, 54, has served as one of our directors since November 1996.
He has served as the Midwest Head of Investment Banking for Donaldson, Lufkin &
Jenrette Securities Corporation since June 1991. Mr. Pond is a director of
Maximus, Inc., a provider of program management and consulting services to
state, county and local government health and human services agencies.
2
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Mitchell H. Saranow, 53, has served as one of our directors since November
1996. Mr. Saranow has served as Chairman of The Saranow Group L.L.C. and its
affiliated companies since October 1984. He founded Fluid Management, L.P. in
April 1987 and served as Chairman and Chief Executive Officer until January
1997. He presently also serves as a director of Lawson Products, Inc., a
distributor of expendable maintenance, repair and replacement products, and as
Chairman of Elf Machinery, L.L.C., an affiliate of The Saranow Group.
James R. Thompson, 62, has served as one of our directors since August
1998. Governor Thompson was named Chairman of the Chicago law firm of Winston &
Strawn in January 1993. He joined the firm in January 1991 as Chairman of the
Executive committee after serving four terms as Governor of the State of
Illinois from 1977 until January 1991. Prior to his terms as Governor, he
served as U.S. Attorney for the Northern District of Illinois from 1971 to 1975.
Governor Thompson served as the Chief of the Department of Law Enforcement and
Public Protection in the Office of the Attorney General of Illinois, as an
Associate Professor at Northwestern University School of Law, and as an
Assistant State's Attorney of Cook County. He is a former Chairman of the
President's Intelligence Oversight Board. Governor Thompson is currently a
member of the Boards of Directors of Union Pacific Resources, Inc., the Chicago
Board of Trade, the National Council on Compensation Insurance, International
Advisory Council of the Bank of Montreal, Prime Retail, Inc., American National
Can Co., Jefferson Smurfit Group, plc, Prime Group Realty Trust, FMC
Corporation, and Hollinger International. He serves on the Board of the Chicago
Historical Society, the Art Institute of Chicago, the Museum of Contemporary
Art, the Lyric Opera and the Illinois Math & Science Academy Foundation.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act requires our directors and
executive officers, and any persons who own more than ten percent of our common
stock, to file with the SEC initial reports of ownership and reports of changes
in ownership of common stock. Such persons are required by SEC regulations to
send us copies of all Section 16(a) forms they file.
To our knowledge, based solely on review of the copies of such reports sent
to us and written representations that no other reports were required, during
the year ended December 31, 1998, all such Section 16(a) filing requirements
were complied with, except that Governor Thompson inadvertently filed his
Initial Statement of Beneficial Ownership on Form 3 late, filing it with the
Statement of Changes in Beneficial Ownership on Form 5 filed by our other
directors and executive officers in February 1999.
3
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Item 11--Executive Compensation.
MANAGEMENT COMPENSATION
General
The following table sets forth compensation awarded or earned by our
President and Chief Executive Officer and the four other most highly paid
executive officers who earned more than $100,000 during the year ended December
31, 1998:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
NAME AND
PRINCIPAL FISCAL OTHER ANNUAL OPTIONS (NO. OF ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION SHARES) COMPENSATION
(1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert P.
Maher, 1996 $281,000 - $ 15,648(2) - $ 859,961
Chairman, 1997 411,250 - 1,500(2) 150,000 -
President and 1998 462,060 - - 375,000 -
Chief Executive
Officer
James F.
Hillman, 1996 118,750 - - 115,500 -
Chief Financial 1997 206,250 - 625(2) 37,500 -
Officer (3) 1998 250,000 - $1,994,063(4) 75,000 -
Barry S. Cain, 1997 150,000 -
Chief 1998 300,000 - 654,563(4) 37,500 -
Administrative
Officer (5)
Stephen J.
Denari, Vice 1997 87,195 - - 153,000 -
President- 1998 175,000 - 1,425,813(4) 75,000 -
Corporate
Development(6)
Charles A.
Demirjian, Vice 1997 29,167 - - 75,000 -
President and 1998 175,000 - 654,563(4) 75,000 -
General
Counsel(7)
</TABLE>
- ---------------
(1) Represents the proportionate share of our net income for the period January
1, 1996 through October 3, 1996. Prior to January 1, 1996, we operated as a
C-corporation. Effective January 1, 1996, the shareholders elected to be
taxed under Subchapter S of the Code. As an S-corporation, our profits are
distributed to shareholders and we are not subject to federal (and some
state) income taxes. The S-corporation election terminated in connection
with the consummation of our initial public offering of common stock on
October 4, 1996.
(2) Represents matching payments and profit sharing under our 401(k) Plan.
(3) Mr. Hillman began his employment with us on April 15, 1996.
(4) Consists of compensation resulting from the exercise of stock options.
(5) Mr. Cain began his employment with us in September 1997.
(6) Mr. Denari began his employment with us in July 1997.
(7) Mr. Demirjian began his employment with us in September 1997.
4
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Executive Option Grants
The following table sets forth the stock option grants we made to each of the
named executive officers in 1998.
OPTIONS GRANTS IN FISCAL 1998
INDIVIDUAL GRANTS
-----------------
<TABLE>
<CAPTION> PERCENT OF
TOTAL OPTIONS
NUMBER OF SECURITIES GRANTED TO EXERCISE GRANT
UNDERLYING OPTIONS EMPLOYEES IN PRICE PER EXPIRATION DATE
NAME GRANTED FISCAL 1998 SHAREDATE DATE VALUE (1)
---- ------- ----------- --------- ---- -----
<S> <C> <C> <C> <C> <C>
Robert P. Maher............ 225,000(2) 6.34 $24.00 1/16/08 1,923,000
150,000(3) 4.23 29.13 10/7/08 1,555,000
James F. Hillman(3)........ 37,500(4) 1.06 28.83 3/3/08 385,000
37,500(3) 1.06 29.13 10/7/08 390,000
Barry S. Cain(3)........... 37,500(3) 1.06 29.13 10/7/08 390,000
Stephen J. Denari(3)....... 37,500(4) 1.06 28.83 3/3/08 385,000
37,500(3) 1.06 29.13 10/7/08 390,000
Charles A. Demirjian(3).... 37,500(4) 1.06 28.83 3/3/08 385,000
37,500(3) 1.06 29.13 10/7/08 390,000
</TABLE>
(1) The fair value of the option grant is estimated as of the date of grant
using the Black-Scholes option pricing model. The following assumptions
were used:
Expected Volatility........................... 45%
Risk-free interest rate....................... 5.0%
Dividend yield................................ 0%
Expected life................................. 3 years
Forfeiture rate............................... 20%
(2) The options were granted on January 16, 1998 at the fair market value of
common stock on that date; 50% of these options became exercisable on April
1, 1999, and the remainder become exercisable 25% on January 16, 2001 and
25% on January 16, 2002.
(3) The options were granted on October 8, 1998 at the fair market value of
common stock on that date and become exercisable 50% on October 8, 2000,
25% on October 8, 2001 and 25% on October 8, 2002.
(4) The options were granted on March 3, 1998 at the fair market value of
common stock on that date and become exercisable 50% on March 3, 2000, 25%
on March 3, 2001 and 25% on March 3, 2002.
5
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Option Exercises and Holdings
The following table sets forth the value of unexercised options held by the
named executive officers on December 31, 1998. The named executive officers
exercised options to purchase 300,000 shares of common stock in 1998. The
approximate values for in-the-money options (which represent the positive spread
between the exercise price of any existing stock options and $48.69 per share,
the closing price of the common stock as reported by the Nasdaq National Market
on December 31, 1998) are also included.
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Shares Underlying Value of Unexercised
Unexercised Options at Fiscal In-The-Money Options at Fiscal
Year End (#) Year End ($)
Shares -------------------------------- ------------------------------
Acquired on Value
Name Exercise (#) Realized Exercisable Unexercisable Exercisable Unexercisable
---- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert P. Maher........ -- -- -- 525,000 -- 13,792,000
James F. Hillman....... 75,000 1,994,063 -- 153,000 -- 4,227,000
Barry S. Cain.......... 37,500 654,563 -- 150,000 -- 3,661,000
Stephen J. Denari...... 75,000 1,425,813 -- 153,000 -- 4,054,000
Charles A. Demirjian... 37,500 654,563 -- 112,500 -- 2,454,000
</TABLE>
Compensation of Directors
Under our Long-Term Incentive Plan, we grant each director not employed by
us an option to purchase 3,000 shares of common stock for each year of the term
to be served upon the director's initial election or re-election to the Board.
Thus, a director elected to a three-year term receives 9,000 options. The
options have an exercise price equal to the fair market value of the common
stock on the date of grant and become exercisable in equal installments over the
term to be served beginning on the first anniversary of the date of grant, so
that 3,000 options become exercisable each year. We also pay directors who are
not executive officers a fee of $1,000 for each Board meeting attended in
person. All directors are reimbursed for travel expenses incurred in connection
with attending board and committee meetings. Directors are not entitled to
additional fees for serving on committees of the Board. From time to time, we
also grant our non-employee directors additional options after reviewing the
level of compensation other companies similarly situated to us pay their non-
employee directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Maher has been a member of the Compensation Committee since January
1997. We did not have a Compensation Committee prior to January 1997. Prior to
January 1997, the entire Board made decisions with respect to executive officer
compensation.
6
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COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
Responsibilities and Composition of the Committee
The Compensation Committee of the Board:
. establishes compensation programs for our executive officers designed
to attract, motivate and retain key executives responsible for our
success;
. administers and maintains the compensation programs in a manner that
will benefit both our long-term interests and those of our
shareholders; and
. determines the compensation of our Chief Executive Officer.
Four directors serve on the committee. We have never employed three of
these directors. The fourth member of the committee is our President, Chief
Executive Officer and Chairman, Robert P. Maher.
This report describes the philosophy that underlies the cash and equity-
based components of our executive compensation program. It also describes the
details of each element of the program and the rationale for compensation paid
to our Chief Executive Officer and our executive officers in general.
Compensation Philosophy and Objectives
The committee believes that our executive officer compensation should be
competitive and based on overall financial results, individual contributions and
teamwork that help build value for you. Within this overall philosophy, the
committee bases the compensation program on the following principles:
. Compensation levels for executive officers are benchmarked to the
outside market, using information from proxy materials of companies
included in the performance graph contained herein. The committee
refers to information in this material regarding two groups of
companies: companies with annual revenues of $250 million to $1
billion, with which we are expected to compete for executive talent;
and the companies included in the performance graph, with which we can
expect to compete for investors.
. The committee targets the total compensation opportunity to the upper-
range of these companies. Executive officers may earn incremental
amounts above or below that level depending upon corporate and
individual performance. The committee considers it essential to our
vitality that the total compensation opportunity for executive officers
remains competitive with similar companies in order to attract and
retain the talent needed to manage and build our business.
. Compensation is tied to performance. A significant part of the total
compensation opportunity may only be earned if specific goals are met.
7
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. The committee designs incentive compensation to reinforce the
achievement of both short- and long-term corporate objectives.
. Executives' interest in the business should be directly linked to the
interests and benefits received by you.
Process and Compensation Components
The committee determines the compensation for our Chief Executive Officer
by using its subjective judgment and taking into account both qualitative and
quantitative factors. No weights are assigned to such factors with respect to
any compensation component. The Chief Executive Officer makes the compensation
decisions for our other key executive officers. However, the committee may make
recommendations concerning these other officers.
In making compensation decisions, the committee considers compensation
practices and financial performance of companies in the Peer Group. This
information provides guidance to the committee, but the committee does not
target total executive compensation or any component of executive compensation
to any particular point within, or outside, the range of Peer Group results.
However, the committee believes it is appropriate to use the base salaries,
total cash compensation and long-term incentive awards of the Peer Group as a
framework for its compensation decisions. Specific compensation for individual
officers will vary because of subjective factors considered by the committee
unrelated to compensation practices of the Peer Group as described in the
section above entitled "Compensation Philosophy and Objectives."
The Peer Group is comprised of the following companies: American
Management Systems, Cambridge Technology Partners, Ciber, Inc., Computer
Horizons Corporation, Gartner Group, Inc., PHB/Hagler-Bailley, Inc., Keane,
Inc., Meta Group, Inc., Sapient Corporation, Technology Solutions Company, and
Whittman-Hart, Inc. The committee compares compensation and financial
performance to various groupings of these companies. All of these companies are
included in the performance peer group used for the shareholder return
performance graph contained herein.
8
<PAGE>
The compensation program has three elements:
. annual base salary;
. annual bonuses, which are based on certain performance objectives; and
. awards under the Incentive Plan, which are based on both our
performance and individual performance.
The committee has approved these elements of compensation to ensure our
total compensation program is comparable to and competitive with that of other
companies of similar size.
Annual Compensation
Base Salary. Base salaries for executive officers are established based on
the scope of the duties and responsibilities of each officer's position. Peer
Group compensation practices are also taken into account. The base salary of
each executive officer is adjusted in or around April of each year.
Annual Bonuses. In July 1996, the Board approved a new compensation
program for executive officers based on certain financial performance criteria,
including revenue growth, profitability and percentage performance of target
goals. Executive officers can earn bonuses equal to between 0% to 125% of their
respective base salaries. The bonus payable, if any, is contingent upon the
attainment of objectives determined by the committee. Other senior managers have
similar bonus arrangements.
Bonuses are paid in cash as soon as determinable after the end of the
calendar year in which they were earned, but prior to March 15. The bonus is
forfeited if employment is terminated before the last day of the calendar year
in which it was earned.
Incentive Plan. The committee believes that stock options and other forms
of equity compensation are an important method of rewarding and motivating
management. In addition, equity compensation aligns management's interests with
those of our shareholders on a long-term basis. The committee recognizes that we
conduct our business in an increasingly competitive industry. In order to
remain highly competitive and at the same time pursue a high-growth strategy, we
must employ the best and most talented executives and managers who possess
demonstrated skills and experience. The committee believes that stock options
and other forms of equity compensation have given and continue to give us a
significant advantage in attracting and retaining such employees. The committee
believes the Incentive Plan is an important feature of our executive
compensation package. Under the Incentive Plan, options and other forms of
equity compensation may be granted to executive officers who are expected to
make important contributions to our future success. In determining the size of
stock option and other equity grants, the committee focuses primarily on our
performance and the perceived role of each executive in accomplishing our
performance objectives, as well as the satisfaction of individual performance
objectives.
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The committee intends to continue using stock options and other forms of
equity compensation as the primary long-term incentive for our executive
officers. Stock options and other equity awards generally provide rewards to
executives only to the extent our stock price increases after they are granted.
Thus, the committee feels that stock options and other equity awards granted
under the Incentive Plan provide executives with incentives that closely align
their interests with yours and encourage them to promote our ongoing success.
Policy on Deductibility of Compensation
Code Section 162(m) prohibits us from deducting for federal income tax
purposes any amount paid in excess of $1,000,000 to either the chief executive
officer or any of the other four most highly paid executive officers.
Compensation above $1,000,000 may be deducted if it is "performance-based
compensation" within the meaning of the Code. The committee believes that our
current compensation arrangements, which are primarily based on performance, are
appropriate and in our best interest and your best interest, without regard to
tax considerations. Thus, if the tax laws or their interpretation change or
other circumstances occur which might make some portion of the executive
compensation non-deductible for federal tax purposes, the committee does not
plan to make significant changes in the basic philosophy and practices reflected
in our executive compensation program.
The committee believes our performance since our stock has been publicly
traded reflects the wisdom of our compensation philosophy.
Chief Executive Officer Compensation
The Chief Executive Officer's salary, bonus and long-term awards follow
the policies described above. For the 1998 fiscal year, Mr. Maher received
$463,000 in base salary payments. He was granted an option to acquire 375,000
shares of common stock under the Incentive Plan. Mr. Maher was awarded no other
bonus and received no matching payments and profit sharing under our 401(k)
Plan.
The committee also approved the compensation of our other executive
officers for 1998, following the principles and procedures outlined in this
report/1/.
COMPENSATION COMMITTEE
Robert P. Maher
Peter B. Pond
Mitchell H. Saranow
James R. Thompson
____________________________
/1/ Pursuant to Item 402(a)(9) of Regulation S-K promulgated by the Securities
and Exchange Commission, neither the "Compensation Committee Report on
Executive Compensation" nor the material under the caption "Shareholder
Return Performance Graph" shall be deemed to be filed with the SEC for
purposes of the Securities Exchange Act of 1934, as amended, nor shall such
report or such material be deemed to be incorporated by reference in any
past or future filing by the Company under the Exchange Act or the
Securities Act of 1933, as amended.
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<PAGE>
SHAREHOLDER RETURN PERFORMANCE GRAPH
The following graph compares the percentage change in the cumulative total
shareholder return on our common stock against The Nasdaq Stock Market U.S.
Index (the "Nasdaq Index") and the Peer Group. The graph assumes that $100 was
invested on October 4, 1996 (the effective date of our initial public offering)
at the initial public offering price of $10.67 per share, in each of our common
stock, the Nasdaq Index and the Peer Group. The graph also assumes that all
dividends were reinvested.
Note: The stock price performance shown below is not necessarily
indicative of future price performance.
COMPARISON OF CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR THE METZLER GROUP, INC.
Prepared by Media General Financial Services
Produced on April 16, 1999, including data to December 31, 1998
[graph reproduced here]
<TABLE>
<CAPTION>
NASDAQ INDEX PEER THE METZLER
MEASUREMENT PERIOD INDEX GROUP GROUP INC.
- ------------------ ----- ----- ----------
<S> <C> <C> <C>
Measurement Point--10/4/96.................................. $100.00 $100.00 $100.00
FYE 12/31/96................................................ $104.71 $106.27 $158.75
FYE 12/31/97................................................ $128.08 $134.46 $200.63
FYE 12/31/98................................................ $180.64 $124.43 $364.97
</TABLE>
Note: (a) The Peer Group is weighted by market capitalization.
(b) Two members of the Peer Group at FYE 12/31/97 ceased to be publicly
traded in 1998. Accordingly, Claremont Technology Group Inc. and Computer
Management SCI are not included in the current Peer Group.
11
<PAGE>
Item 12--Security Ownership of Certain Beneficial Owners and Management.
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 March 31, 1999 by: (i) each person we know to
own beneficially more than five percent of the outstanding shares of common
stock; (ii) each of our directors and nominees; (iii) each of the named
executive officers; and (iv) all of our directors and executive officers as a
group. (Each person named below has an address in care of our principal
executive offices.) We believe that each person named below has sole voting and
investment power with respect to all shares of common stock shown as
beneficially owned by such holder, subject to community property laws where
applicable.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED (1)
----------------------------
OFFICERS, DIRECTORS AND 5% SHAREHOLDERS NUMBER PERCENT
- --------------------------------------- ----------------------------
<S> <C> <C>
Robert P. Maher(2)............................................................. 813,765 1.9%
James F. Hillman(3)............................................................ 18,750 *
Peter B. Pond(3)............................................................... 21,000 *
Mitchell H. Saranow(4)......................................................... 24,000 *
Barry S. Cain(5)............................................................... 19,819 *
James R. Thompson.............................................................. -- *
Stephen J. Denari(3)........................................................... -- *
Charles A. Demirjian(5)........................................................ 18,965 *
All directors and executive officers as a group (8 persons).................... 917,799 2.2%
</TABLE>
- --------
*less than 1%
(1) Applicable percentage of ownership as of March 31, 1999 is based upon
approximately 42,250,000 shares of common stock outstanding. Beneficial
ownership is a technical term determined in accordance with the rules of
the SEC. Beneficial ownership generally means that a Shareholder can vote
or sell the stock either directly or indirectly.
(2) Excludes shares held by Mr. Maher's children, for which he disclaims
beneficial ownership. Includes 112,500 shares of common stock subject to
options that became exercisable on April 1, 1999.
(3) Consists of shares of common stock subject to options that are or become
exercisable within 60 days of March 31, 1999.
(4) Includes 21,000 shares of common stock subject to options that are or
become exercisable within 60 days of March 31, 1999.
(5) Includes 18,750 shares of common stock subject to options that became
exercisable on April 1, 1999.
Item 13--Certain Relationships and Related Transactions.
Peter B. Pond, one of our directors, is a principal of Donaldson,
Lufkin & Jenrette Securities Corporation. DLJ sometimes provides and in the past
has provided us with investment banking services. DLJ served as the lead manager
in our secondary offerings that were completed in March 1998 and November 1998.
In connection with these offerings, the
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underwriting syndicates, of which DLJ was a part, received underwriting fees
equal to approximately $5.0 million. In addition, DLJ served as an advisor on
certain transactions last year and was paid fees of approximately $3.8 million
for these services. In April 1999, we agreed to accept notes from Messrs. Cain,
Demirjian and Maher so that they could exercise their then-vested options. The
notes will be delivered upon issuance of the shares, and the interest rate will
be determined effective as of the date of issuance. Mr. Cain's and Mr.
Demirjian's notes will each be for $425,063; Mr. Maher's note will be for $2.7
million.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Act of 1934, as amended, the registrant has caused this amendment to report to
be signed on its behalf by the undersigned thereunto duly authorized.
April 30, 1999
The Metzler Group, Inc.
By: /s/ Robert P. Maher
-------------------
Robert P. Maher
Chairman, President and Chief
Executive Officer, Director
By: /s/ Barry S. Cain
-----------------
Barry S. Cain
Director
By: /s/ James F. Hillman
--------------------
James F. Hillman
Chief Financial Officer
By: /s/ Peter B. Pond
-----------------
Peter B. Pond
Director
By: /s/ Mitchell H. Saranow
-----------------------
Mitchell H. Saranow
Director
By: /s/ Governor James R. Thompson
------------------------------
Governor James R. Thompson
Director
14
