<PAGE>
EXHIBIT 99.1
For Immediate Release
For more information contact:
Luther J. Nussbaum
Chairman and CEO
First Consulting Group
562-624-5221
[email protected]
Chuck McBride
CFO
First Consulting Group
562-624-5200
[email protected]
FIRST CONSULTING GROUP IMPLEMENTS RESCISSION PROGRAM FOR VICE
PRESIDENT STOCK LOANS
- Program anticipated to reduce shares outstanding by approximately 1.8
million shares
- Program not expected to result in any accounting charge nor any change
to stockholders' equity
LONG BEACH, CALIF. (DECEMBER 14, 2000) -- First Consulting Group, Inc. (NASDAQ:
FCGI) announced that it is offering to rescind stock purchase transactions
entered into by its vice presidents. Since 1994, FCG has required each of its
vice presidents, including its executive officers, to purchase either one or two
times their annual salary in FCG stock. Generally, vice presidents purchased
shares directly from FCG, with FCG loaning the purchase amount to the vice
president. This requirement was intended to be one method of aligning the
interests of FCG's officers with those of shareholders.
RESCISSION PROGRAM
FCG has outstanding loans with 85 current and 16 former vice presidents, with
the loans secured by FCG stock. Of the 101 participants, 73 (including the 16
former vice presidents) owe amounts to FCG in excess of the value of the shares
purchased by those vice presidents. In October 2000, one of FCG's former vice
presidents who has a loan balance in excess of the value of the vice president's
shares filed a lawsuit against FCG challenging the enforceability of the stock
purchase and loan transaction. This former vice president has alleged that FCG
violated California law and public policy by requiring vice presidents to
purchase stock as a condition of becoming a vice president.
Page 3
<PAGE>
In order to address these issues, FCG's Board of Directors has voted to
eliminate any future stock purchase or holding requirements for its vice
presidents and offered to rescind each stock loan transaction made by each
current and former vice president. The rescission, if accepted by the vice
president, will include 1) cancellation of the promissory note for the purchase
price of the shares, 2) cancellation of the shares purchased with the proceeds
of the promissory note and 3) refund of any principal payments made on the
cancelled promissory note.
Luther Nussbaum, chairman and chief executive officer said, "The vice president
stock purchase program and associated loans were created to provide our leaders
the opportunity to participate in building equity through FCG stock
appreciation. We believe that it is important to fully align the interests of
key employees with those of all FCG shareholders. With the recent decline in our
stock price, this program is working as a disincentive and we now have a former
employee issuing a legal challenge. After a careful review of the law and our
options to maximize retention of our key people, we decided it was in the best
interest of all shareholders to remove the stock purchase requirement and
rescind outstanding loans for those who choose to do so."
FINANCIAL STATEMENT EFFECTS
The effects of this announced program on the financial statements of FCG are
anticipated to be:
- Impact on cash: The stock sales were "cashless" transactions in which
FCG primarily delivered newly issued shares of FCG common stock to the
vice presidents, with the vice presidents signing promissory notes for
purchase price of the shares. Since FCG will be refunding
approximately $200,000 that was repaid against loans FCG expects will
be rescinded, cash will be reduced by this amount.
- Impact on total stockholder's equity: The promissory notes have been
carried on FCG's consolidated balance sheets as an offset to equity.
Accordingly, FCG's "Total stockholders' equity," as reported on the
consolidated balance sheets, will not change other than to reflect the
refund of the $200,000 in payments noted above.
- Impact on income statement: FCG expects that it will not recognize any
operating or one-time charge in connection with this rescission.
FCG estimates that, if all 73 of the current and former vice presidents who
currently owe amounts in excess of the value of their shareholdings participate
in the rescission program, FCG will cancel approximately $21.3 million in stock
loans and retire 1.8 million shares of common stock, plus refund approximately
$200,000 in loan repayments. FCG also estimates that, if all 28 current vice
presidents who hold stock valued in excess of their loan balances retain their
loans, those vice presidents will continue to hold 3.9 million shares of FCG
stock with loan balances of $4.9 million. These shares represent 16.9% of the
23.2 million shares outstanding after completion of the rescission program.
ABOUT FIRST CONSULTING GROUP
First Consulting Group is a leading provider of information-based consulting,
integration and management services for healthcare, pharmaceutical and other
life sciences organizations in North America and Europe. The firm's services are
designed to increase its clients' operations
Page 4
<PAGE>
effectiveness, resulting in reduced costs, improved customer service, enhanced
quality of patient care and the more rapid introduction of new pharmaceutical
compounds. More information about FCG is available through the FCG World Wide
Web site at www.fcg.com or by calling the toll free number 800-345-0957.
FORWARD LOOKING STATEMENTS
This release contains forward looking statements including (i) expectations
regarding the number of vice presidents who will participate in the rescission
program, (ii) expectations regarding the number of shares of stock and the
amount of loans that will be cancelled in the rescission program, (iii) the
number of shares of stock held by, and the amount of loans owed by, vice
presidents following completion of the rescission program, and (iv) the
accounting treatment of the rescission program. These forward looking statements
involve known and unknown risks which may cause our actual results and
performance to be materially different from the future results and performance
stated or implied by the forward looking statements. Some of the risks you
should consider include the following: (a) the unpredictable nature of each vice
president's consideration of the rescission program; (b) uncertainty over the
final accounting treatment for the rescinded loans; and (c) other risk factors
referenced in our most recent Forms 10-K, 10-Q and other periodic reports filed
with the Securities and Exchange Commission.
Page 5
