<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
DA CONSULTING GROUP, INC.
______________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
______________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-
11.
(1) Title of each class of securities to which transaction applies:
______________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
______________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
______________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
______________________________________________________________________________
(5) Total fee paid:
______________________________________________________________________________
[ ] Fee paid previously with preliminary materials.
______________________________________________________________________________
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
______________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
_______________________________________________________________________________
(3) Filing Party:
______________________________________________________________________________
(4) Date Filed:
______________________________________________________________________________
<PAGE>
DA CONSULTING GROUP, INC.
SAN FELIPE PLAZA
5847 SAN FELIPE, SUITE 3700
HOUSTON, TX 77057
__________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 3, 1999
__________________
To the Shareholders of DA Consulting Group, Inc.:
The Annual Meeting of Shareholders of DA Consulting Group, Inc, a Texas
corporation (the "Company") will be held at 12:30 p.m., local time, on May 3,
1999, at Tony's, 1801 Post Oak Boulevard, Houston, Texas, for the following
purposes:
1. To elect two Class I directors of the Company for a three-year term,
ending at the Company's 2002 Annual Meeting of Shareholders, and one Class III
director of the Company for a two-year term, ending at the Company's 2001 Annual
Meeting of Shareholders;
2. To ratify the appointment of PricewaterhouseCoopers LLP as independent
accountants for the Company for the fiscal year ending December 31, 1999; and
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Only holders of shares of the Company's Common Stock at the close of
business on March 24, 1999 are entitled to notice of, and to vote at, the Annual
Meeting and any adjournments or postponements thereof. Such shareholders may
vote in person or by proxy. The stock transfer books of the Company will not be
closed. The accompanying form of proxy is solicited by the Board of Directors
of the Company.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. YOU ARE
CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT YOU EXPECT TO
ATTEND IN PERSON, YOU ARE URGED TO COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY
CARD IN THE SELF-ADDRESSED ENVELOPE, ENCLOSED FOR YOUR CONVENIENCE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU DECIDE TO ATTEND THE
MEETING AND WISH TO VOTE IN PERSON, YOU MAY REVOKE YOUR PROXY BY WRITTEN NOTICE
AT THAT TIME.
By Order of the Board of Directors
/s/Nicholas H. Marriner
Nicholas H. Marriner
Chairman of the Board & Chief Executive Officer
March 29, 1999
<PAGE>
DA CONSULTING GROUP, INC.
SAN FELIPE PLAZA
5847 SAN FELIPE, SUITE 3700
HOUSTON, TX 77057
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
MAY 3, 1999
------------------
This Proxy Statement, which is first being mailed to shareholders on or
about March 29, 1999, is furnished in connection with the solicitation by the
Board of Directors of DA Consulting Group, Inc. (the "Company") of proxies to be
used at the Annual Meeting of Shareholders of the Company (the "Annual
Meeting"), to be held at 12:30 p.m. on May 3, 1999, at Tony's, 1801 Post Oak
Boulevard, Houston, Texas, and at any adjournments or postponements thereof. If
proxies in the accompanying form are properly executed and returned prior to
voting at the meeting, the shares represented thereby will be voted as
instructed on the proxy. If no instructions are given on a properly executed
and returned proxy, the shares represented thereby will be voted (i) in favor of
the election of the nominees for director named below, (ii) in favor of the
ratification of the appointment of PricewaterhouseCoopers LLP as the Company's
independent accountants for the fiscal year ending December 31, 1999, and (iii)
in support of management on such other business as may properly come before the
Annual Meeting or any adjournments thereof. Shareholders whose shares are held
of record by a broker or other nominee are nevertheless encouraged to fill in
the boxes of their choice on the proxy, as brokers and other nominees may not be
permitted to vote shares with respect to certain matters for which they have not
received specific instructions from the beneficial owners of the shares. Any
proxy may be revoked by a shareholder prior to its exercise upon written notice
to the Secretary of the Company, by delivering a duly executed proxy bearing a
later date, or by the vote of a shareholder cast in person at the Annual
Meeting.
VOTING
Holders of record of the Company's Common Stock on March 24, 1999, will be
entitled to vote at the Annual Meeting or any adjournments or postponements
thereof. As of that date, there were 6,550,074 shares of Common Stock
outstanding and entitled to vote. The presence, in person or by proxy, of
holders of Common Stock entitled to cast at least a majority of the votes which
all holders of Common Stock are entitled to cast will constitute a quorum for
purposes of the transaction of business.
<PAGE>
Each share of Common Stock entitles the holder thereof to one vote on the
election of each nominee for director and on any other matter that may properly
come before the Annual Meeting. Shareholders are not entitled to cumulative
voting in the election of directors.
Under Texas law and the By-laws of the Company, the presence of a quorum is
required for each matter to be acted upon at the Annual Meeting. The presence
at the Annual Meeting in person or by proxy, of shareholders entitled to cast at
least a majority of the votes that all shareholders are entitled to cast on a
particular matter shall constitute a quorum for the purposes of consideration
and action on the matter. Directors are elected by a plurality vote. All other
actions to be taken by the shareholders at the Annual Meeting shall be taken by
the affirmative vote of a majority of the votes cast by all shareholders
entitled to vote thereon. Votes that are withheld and abstentions will be
counted in determining the presence of a quorum, but will not be counted in
determining the number of votes cast in connection with any particular matter.
Broker non-votes, which occur when a broker or other nominee holding shares for
a beneficial owner does not vote on a proposal because the broker or other
nominee has not received specific instructions from the beneficial owners, are
not voted and will therefore have no effect on the outcome of any of the matters
to be voted upon at the Annual Meeting.
The cost of solicitation of proxies by the Board of Directors will be borne
by the Company. Proxies may be solicited by mail, personal interview, telephone
or telegraph and, in addition, directors, officers and regular employees of the
Company may solicit proxies by such methods without additional remuneration.
Banks, brokerage houses and other institutions, nominees or fiduciaries will be
requested to forward the proxy materials to beneficial owners in order to
solicit authorizations for the execution of proxies. The Company will, upon
request, reimburse such banks, brokerage houses and other institutions, nominees
and fiduciaries for their expenses in forwarding such proxy materials to the
beneficial owners of the Company's stock.
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Company's Board of Directors consists of six members, divided into
three classes, with the directors in each class serving for staggered three-year
terms and until their successors are elected and qualified. At the Annual
Meeting, the two Class I directors will be elected to serve for a term of three
years and one Class III director will be elected to serve for a term of two
years, each until their successors are elected and qualified. Unless otherwise
specified in the accompanying proxy, the shares of Common Stock voted pursuant
thereto will be cast for Nigel W.E. Curlet and Gunther E.A. Fritze, each for
terms expiring at the Annual Meeting of Shareholders to be held in 2002, and for
Patrick J. Newton for a term expiring at the Annual Meeting of Shareholders to
be held in 2001. If, for any reason, at the time of election, any of the
nominees named should decline or be unable to accept his nomination or election,
it is intended that such proxy will be voted for the election, in the nominee's
place, of a substituted nominee,
-2-
<PAGE>
who would be recommended by the Board of Directors. The Board of Directors,
however, has no reason to believe that either of the nominees will be unable or
unwilling to serve as a director. Three directors will continue to serve as
directors following the Annual Meeting as set forth below, with two Class II
directors having a term expiring at the 2000 Annual Meeting of Shareholders and
one Class III director having a term expiring at the 2001 Annual Meeting of
Shareholders.
The following biographical information is furnished as to each nominee for
election as a director and each of the current directors:
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
Class I Directors for a Three Year Term Expiring at the 2002 Annual Meeting
---------------------------------------------------------------------------
Nigel W.E. Curlet has served as a director since December 1996. Since
1976, he has been employed in various capacities by Shell Chemical Company and
is currently its Manager - Demand Chain Center of Excellence. Mr. Curlet's
prior management roles at Shell were in its information technology, research and
development, and operations and strategic planning departments. He is a member
of the Company's Audit and Compensation Committees.
Gunther E.A. Fritze has served as a director since December 1996. Since
1962, he has been employed in various capacities by Bank of Boston and is
currently its Manager, Finance Companies. Mr. Fritze is a member of the Audit
and Compensation Committees.
Class III Director for a Two Year Term Expiring at the 2001 Annual Meeting
--------------------------------------------------------------------------
Patrick J. Newton joined the Company in London in 1991 as a consultant. He
was promoted to Branch Manager of the Mobile Group in July 1995, to Vice
President of the Mobile Group in January 1996, to President of the Americas
Division in July 1996, to Chief Operating Officer of the Company in January
1997, and to President and Chief Operating Officer of the Company in August
1998.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
Class II Members - Terms Expiring at 2000 Annual Meeting
--------------------------------------------------------
Virginia L. Pierpont founded the Company as a sole proprietorship in 1984,
incorporated the business in 1987, and opened its United Kingdom operation in
1988. Ms. Pierpont was the Chief Executive Officer of the Company from 1984 to
1993 and was Chair of the Board from December 1996 through August 1998. Ms.
Pierpont is married to Mr. Marriner. She is a member of the Company's
Compensation Committee.
-3-
<PAGE>
Richard W. Thatcher, Jr. has served as a director since December 1996.
Since 1992, he has been Senior Vice President in the investment banking
department of Pennsylvania Merchant Group Ltd. Mr. Thatcher is a member of the
Audit Committee.
Class III Member - Term Expiring at 2001 Annual Meeting
-------------------------------------------------------
Nicholas H. Marriner joined the Company in 1991 as its Financial Director
and in 1993 became the Company's President and Chief Executive Officer. In
August 1998, Mr. Marriner was elected Chairman of the Board and stepped down as
President. Until June 1996, Mr. Marriner was also a partner in Clark Whitehill
Josolyne, an accounting firm which provides accounting services to the Company.
Mr. Marriner is married to Ms. Pierpont.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1 TO ELECT ALL
NOMINEES.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
During the Company's 1998 fiscal year, which ended on December 31, 1998,
the Board of Directors held three meetings. Each director attended at least 75%
of the aggregate of the total number of meetings of the Board of Directors and
committees of the Board of Directors on which he or she served.
During 1998, the Audit Committee, which consisted of Messrs. Curlet,
Fritze, and Thatcher, met two times. The function of the Audit Committee is to
(i) review the qualifications of the Company's independent public accountants
who audit the Company's books and records, (ii) make recommendations to the
Board of Directors regarding the annual selection of these independent
accountants, (iii) review the scope, fees and results of any audit, and (iv)
review nonaudit services and related fees provided by the independent
accountants.
During 1998, the Compensation Committee, which consisted of Ms. Pierpont
and Messrs. Curlet and Fritze, met two times. The Compensation Committee is
responsible for determining compensation for the executive officers of the
Company, including bonus and benefits. In addition, the Compensation Committee
administers the Company's compensation programs, including the 1997 Stock Option
Plan.
The Company does not have a standing Nominating Committee.
-4-
<PAGE>
COMPENSATION OF DIRECTORS
During 1998, the Company paid each director who was not also an employee of
the Company an annual fee of $1,250 for each Board and Committee meeting
attended by such director in person. Effective January 1, 1999, the Company
intends to pay each non-employee director an annual retainer of $12,500, and to
award (as of and on the Annual Meeting date) pursuant to the Company's 1997
Stock Option Plan, each such director that number of options to purchase Common
Stock determined by dividing $10,000 by the fair market value of a share of
Common Stock on the date of the Annual Meeting. The Company will no longer pay
meeting attendance fees. The Company also reimburses directors for travel
expenses incurred on behalf of the Company.
EXECUTIVE COMPENSATION
CASH AND NON-CASH COMPENSATION PAID TO CERTAIN EXECUTIVE OFFICERS
The following table sets forth, with respect to services rendered during
1998, 1997 and 1996, the total compensation paid by the Company to the Company's
Chief Executive Officer and each other executive officer whose total annual
salary and bonus exceeded $100,000 during 1998 (the "named executive officers").
-5-
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION (1) AWARDS
------------------------- ------
SECURITIES ALL OTHER
UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) (2) BONUS($) OPTIONS (#) ($) (3)
- ------------------------------------------- ---- ------------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Nicholas H. Marriner 1998 $432,000 $168,480 --- ---
Chairman of the Board and 1997 $270,000 $205,878 --- $ 7,979
Chief Executive Officer 1996 $180,000 $129,600 --- $ 9,885
Patrick J. Newton 1998 $306,000 $295,068 42,000 $2,192,400
President and Chief Operating Officer 1997 $210,000 $ 95,317 8,400 ---
1996 $125,000 $125,000 --- $ 291,960
Michael J. Mackey (4) 1998 $185,370 $108,744 42,000 ---
Executive Vice President - Finance and 1997 $142,083 $ 35,805 63,000 $ 4,354
Administration, Chief Financial Officer
Lisa L. Costello 1998 $156,313 $ 36,042 21,000 ---
Executive Vice President - 1997 $113,927 $ 56,000 21,000 $ 7,657
Research and Development 1996 $ 97,200 $ 32,500 --- $ 300
Eric J. Fernette (5) 1998 $176,001 $132,818 4,200 ---
Executive Vice President - 1997 $ 48,159 $ 20,000 25,200 ---
Human Resources
</TABLE>
(1) All figures converted to U.S. dollars based upon the exchange rate at the
end of the applicable fiscal year.
(2) Salary includes amounts deferred, if any, pursuant to the Company's 401(k)
plan.
(3) Amounts include compensation expense attributed to employee stock awards,
employer 401(k) contributions and Company perquisites. Mr. Newton's "all
other compensation" represents shares of Common Stock awarded to him
without cash consideration.
(4) Mr. Mackey was elected as an executive officer of the Company on February
1, 1997 at a base annual salary of $155,000. Options with respect to 63,000
shares of Common Stock were granted to Mr. Mackey on February 1, 1997.
(5) Mr. Fernette was elected as an executive officer of the Company on July 28,
1997 at a base annual salary of $155,000. Options with respect to 25,200
shares of Common Stock were granted to Mr. Fernette on August 1, 1997.
The Company entered into employment agreements with the named executive
officers effective January 1, 1998, the initial terms of which expired on
December 31, 1998. The initial base annual salaries under the employment
agreements of the named executive officers are $432,000 for Mr. Marriner,
$306,000 for Mr. Newton, $169,200 for Mr. Mackey, $144,000 for Ms. Costello, and
$144,000 for Mr. Fernette. The base annual salary of each of the named executive
officers is subject to increases periodically at the discretion of the Board of
Directors,
-6-
<PAGE>
and each named executive officer may receive an annual bonus as determined by
the Board of Directors. Each of the employment agreements provides for customary
benefits, including life, health and disability insurance and 401(k) plan
participation and further provides that if the employee is terminated without
cause, such employee is entitled to severance pay of up to 18 months base
salary, bonus, and benefits. In the event such employee is terminated in
connection with a change in control (as defined therein), Mr. Fernette and Ms.
Costello would be entitled to receive one year's base salary and benefits and
100% of any bonus paid with respect to the calendar year immediately preceding
termination, and Messrs. Mariner, Newton, and Mackey would be entitled to
receive two years' base salary and benefits and 200% of any bonus paid with
respect to the calendar year immediately preceding termination. All of the
employment agreements were renewed under the same terms on January 1, 1999.
In addition, the Company maintains, and is the beneficiary of, "key man"
life insurance policies on the lives of Messrs. Marriner, Newton, and Mackey
each in the face amount of $1.0 million.
STOCK OPTIONS GRANTED TO CERTAIN EXECUTIVE OFFICERS DURING LAST FISCAL YEAR
Under the 1997 Stock Option Plan, options to purchase Common Stock are
available for grant to directors, officers and other key employees of the
Company. The following table sets forth certain information regarding options
for the purchase of Common Stock that were awarded to the named executive
officers during 1998.
-7-
<PAGE>
OPTION GRANTS IN CALENDAR YEAR 1998
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Number of Potential Realizable Gain
Securities Percent of Total at Assumed Annual Rates
Underlying Options Granted Exercise or of Stock Appreciation for
Options to Employees in Base Price Expiration Option Terms
Name Granted (#) Last Fiscal Year- ($/Sh) (1) Date (2) Compounded Annually
- ----------------------- ----------- ----------------- --------- ---------- --------------------------------
5% 10%
---------- ----------
Nicholas H. Marriner. ---- ---- ---- ---- ---- ----
Patrick J. Newton 42,000 11.6% $14.50 11/30/08 $382,997 $970,589
Michael J. Mackey 42,000 11.6 14.50 11/30/08 $382,997 $970,589
Lisa L. Costello 21,000 5.8 14.50 11/30/08 $191,498 $485,295
Eric J. Fernette 4,200 1.1 14.50 11/30/08 $ 38,300 $ 97,059
- -------------------------
</TABLE>
(1) The exercise price equaled the fair market value of a share of Common
Stock on the date of grant as determined by the Board of Directors. The
exercise price is payable in cash or by delivery of shares of Common Stock
having a fair market value equal to the exercise price of the options
exercised.
(2) All options vest in one-third installments on the second, third, and fourth
anniversaries of the date of grant.
STOCK OPTIONS EXERCISED BY NAMED EXECUTIVE OFFICERS DURING 1998 AND HELD BY
NAMED EXECUTIVE OFFICERS AT DECEMBER 31, 1998
No options granted by the Company were exercised by the named executive
officers during 1998. The following table sets forth certain information
regarding options for the purchase of Common Stock that were held by the named
executive officers.
-8-
<PAGE>
AGGREGATED OPTIONS EXERCISED IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Shares Number of Securities
Acquired on Value Underlying Unexercised Value of unexpected In-the-
Name Exercise (#) Realized($) Options at FY-End (#) Money Options at FY-End($)
- ---------------------- ------------ ------------ ---------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Exercisable Unexercisable Exercisable Unexercisable
----------- -------------- ------------ --------------
Nicholas H. Marriner ---- ---- ---- ---- ---- ----
Patrick J. Newton ---- ---- ---- 42,000 ---- $ 309,750
Michael J. Mackey ---- ---- ---- 42,000 ---- $ 309,750
Lisa L. Costello ---- ---- ---- 21,000 ---- $ 154,875
Eric J. Fernette ---- ---- ---- 4,200 ---- $ 30,975
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The function of the Compensation Committee is to advise the Board
regarding overall compensation policies and recommend specific compensation for
the Company's senior executives. The Compensation Committee is responsible for
providing guidance to the Board of Directors regarding broad compensation
issues. The Committee is composed of Ms. Pierpont and Messrs. Curlet and
Fritze.
The Company applies a consistent philosophy to compensation for all
employees, including senior management. This philosophy is based on the premises
that the success of the Company results from the efforts of each employee and
that a cooperative, team-oriented environment is an essential part of the
Company's culture. The Company believes in the importance of rewarding employees
for the Company's successes. Particular emphasis is placed on broad employee
equity participation through the use of stock options and annual cash bonuses
linked to overall Company profitability.
The Committee has retained a leading compensation consulting firm to
advise the Committee on the Company's executive compensation programs. The
consultants' review provides benchmarks for comparison of executive compensation
to that of other companies whose business is similar in nature to the Company's
or who may compete with the Company for executive talent. The compensation
consultants advise the Committee using resources that include publicly available
information and the consultants' prior experience.
-9-
<PAGE>
The principal elements of the Company's executive compensation program
consist of both annual compensation (primarily base salary and annual incentive
cash bonuses) and long-term incentive compensation in the form of stock options.
Base salary, annual cash bonuses, and option grants are determined on the basis
of the overall financial performance of the Company and the performance of the
individual officer.
The Compensation Committee recommends base salary levels and annual
cash bonuses of the Company's senior management for approval by the Board. The
Board approved base salaries of $432,000 for the Company's Chief Executive
Officer and $306,000 for the Company's Chief Operating Officer, effective
January 1998. The Compensation Committee recommended, and the Board approved,
bonuses of $168,480 for the Company's Chief Executive Officer and $295,068 for
the Company's Chief Operating Officer for 1998.
The Compensation Committee from time to time will grant options of the
Company's Common Stock to executive officers in an effort to further align their
long-term interests with those of the Company and the Company's other
shareholders. During 1998, the Company granted stock options for 396,090 shares
to officers and employees of the Company (of which 109,200 were granted to
executive officers of the Company). The executive officers also directly own a
meaningful percentage of the Company's Common Stock, and, therefore, each of
them participates proportionately in any increase in shareholder value. The
Compensation Committee believes that the directors' officers' and employees'
existing equity ownership and stock options sufficiently link their interests to
the financial success of the Company.
Nigel W.E. Curlet, Chair
Gunther E.A. Fritze
Virginia L. Pierpont
-10-
<PAGE>
STOCK PERFORMANCE CHART
The following Stock Performance Chart compares the Company's cumulative
total shareholder return on its Common Stock quarterly, for the period from
April 24, 1998 (the date the Common Stock commenced trading on the Nasdaq
National Market) to December 31, 1998 (the date the Company's 1998 fiscal year
ended), with the cumulative total return of the Nasdaq Composite and Nasdaq
Computer and Data Processing Indices. The comparison assumes $100 was invested
on April 24, 1998 in the Company's Common Stock and in each of the foregoing
indices and assumes reinvestment of dividends.
TOTAL SHAREHOLDERS RETURNS
--------------------------
(DIVIDENDS REINVESTED)
ANNUAL RETURN PERCENTAGE
Quarter Ending
Company/Index Jun98 Sep98 Dec98
- --------------------------------------------------------------------------------
DA CONSULTING GROUP (0.86) 6.09 43.44
NASDAQ US COMPOSITE 1.18 (9.47) 28.97
NASDAQ COMPUTER & DATA PROCESSING (3.16) (15.66) 13.26
INDEX RETURNS
Quarter Ending
Base
Period
Company/Index 24Apr98 Jun98 Sep98 Dec98
- --------------------------------------------------------------------------------
DA CONSULTING GROUP INC. 100 99.14 105.17 150.86
NASDAQ US COMPASITE 100 101.18 91.60 118.14
NASDAQ COMPUTER & DATA
PROCESSING 100 96.84 81.68 92.50
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of March 1, 1999, with
respect to the beneficial ownership of shares of Common Stock of the Company by
each person who is known to the Company to be the beneficial owner of more than
five percent of either class of stock, by each director or nominee for director,
by each of the named executive officers, and by all directors and executive
officers as a group. Unless otherwise indicated, each person listed has sole
voting power and sole investment power over the shares indicated.
-11-
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature of Percent of Voting
Name and Address of Beneficial Owner (1) Beneficial Ownership Power
- ------------------------------------------------- ------------------ -----------------
EXECUTIVE OFFICERS AND DIRECTORS
<S> <C> <C>
Nicholas H. Marriner 370,000 5.6%
Patrick J. Newton (2) 101,080 1.5%
Michael J. Mackey (3) 41,790 *
Lisa L. Costello (4) 7,000 *
Eric J. Fernette 30,240 *
Nigel W.E. Curlet (5)(6) 25,350 *
Gunther E.A. Fritze (5)(7) 39,900 *
Richard W. Thatcher, Jr. (5) 76,220 1.2%
Virginia L. Pierpont 390,817 6.0%
OTHER SHAREHOLDERS
Amicable Discretionary Trust (8)(9)(11) 693,200 10.6%
Worcester Discretionary Trust (8)(10)(11) 631,092 9.6%
Woodbourne Discretionary Trust (8)(10)(11) 629,034 9.6%
All directors and executive officers as a group
(9 persons) 1,082,397 16.5%
____________________________
* Less than 1%
</TABLE>
(1) The address of each person named in the table is: c/o DA Consulting Group,
Inc., San Felipe Plaza, 5847 San Felipe, Suite 3700, Houston, TX 77057.
(2) Includes 2,800 shares of Common Stock that may be acquired upon the
exercise of stock options.
(3) Includes 21,000 shares of Common Stock that may be acquired upon the
exercise of stock options.
(4) Includes 2,800 shares of Common Stock that may be acquired upon the
exercise of stock options.
(5) Includes 12,600 shares of Common Stock that may be acquired upon the
exercise of stock options.
(6) Includes 11,300 shares owned by Mr. Curlet's spouse and 1,450 shares owned
by his son.
(7) Includes 12,600 shares owned by Mr. Fritze's children.
(8) John Andrew Cowan and Roger Geoffrey Barrs are the co-trustees of each of
these trusts. Messrs. Cowan and Barrs are also trustees of the David
Michael Payne Settlement (which beneficially owns 21,000 shares of Common
Stock), the sole beneficiary of which is Piero Granelli, a former employee
of the Company.
(9) The beneficiaries under this trust include Ms. Pierpont, her children and
grandchildren, the spouses and children of any of the beneficiaries, and
any other persons or class of persons named by the trustees. As of the
date above, no other persons or classes of persons have been so named.
-12-
<PAGE>
(10) The beneficiaries under these trusts include Ms. Pierpont, her children,
the spouses and children of any of the beneficiaries, and any other persons
or class of persons named by the trustees. As of the date above, no other
persons or classes of persons have been so named.
(11) The trustees of each of these trusts have the authority to appoint all or
any part of the capital and income of the trust for one or more of the
beneficiaries and in such names and proportions and at such time as such
trustees shall determine.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
During the years ended December 31, 1996, 1997 and 1998, the Company paid
$58,000, $23,000 and $12,000, respectively, for accounting services provided by
an accountancy practice in which the Company's Chief Executive Officer was a
partner until June 30, 1996.
Until December 31, 1997, the Company leased a facility in Leeds, England
from its Chief Executive Officer and office space in Johannesburg, South Africa
from an entity of which the Chief Executive Officer and a former employee of the
Company are owners. The aggregate rent paid by the Company for these properties
was $38,000 in 1996, $28,000 in 1997 and $8,000 in 1998.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission ("SEC") initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Officers, directors and greater than ten-percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the year ended December 31, 1998, all Section
16(a) filing requirements applicable to the Company's officers, directors and
greater than ten-percent beneficial owners were complied with.
-13-
<PAGE>
RATIFICATION OF
APPOINTMENT OF ACCOUNTANTS
(PROPOSAL 2)
The Board of Directors has selected PricewaterhouseCoopers LLP, independent
public accountants, to audit the consolidated financial statements of the
Company for the fiscal year ending December 31, 1999, and recommends that the
shareholders ratify such selection. This appointment is being submitted to the
shareholders for ratification at the Annual Meeting.
The submission of the appointment of PricewaterhouseCoopers LLP is not
required by law or by the By-laws of the Company. The Board of Directors is
nevertheless submitting it to the shareholders to ascertain their views. If the
shareholders do not ratify the appointment, the selection of other independent
public accountants will be considered by the Board of Directors. If
PricewaterhouseCoopers LLP shall decline to accept or become incapable of
accepting it appointment, or if its appointment is otherwise discontinued, the
Board of Directors will appoint other independent public accountants.
A representative of PricewaterhouseCoopers LLP is expected to be present at
the Annual Meeting, will have the opportunity to make a statement, and will be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2 TO RATIFY THE
APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS FOR THE
YEAR ENDING DECEMBER 31, 1999.
OTHER BUSINESS
Management knows of no other matters that will be presented at the Annual
Meeting. However, if any other matter properly comes before the meeting, or any
adjournment or postponement thereof, it is intended that proxies in the
accompanying form will be voted in accordance with the judgment of the persons
named therein.
ANNUAL REPORT
A copy of the Company's Annual Report to Shareholders for the fiscal year
ended December 31, 1998 accompanies this Proxy Statement.
-14-
<PAGE>
SHAREHOLDER PROPOSALS
To be eligible for inclusion in the Company's proxy materials for the 2000
Annual Meeting of Shareholders, a proposal intended to be presented by a
shareholder for action at that meeting must, in addition to meeting the
shareholder eligibility and other requirements of the Securities and Exchange
Commission's rules governing such proposals, be received not later than November
30, 1999,by the Chief Financial Officer of the Company at the Company's
principal executive offices, San Felipe Plaza, 5847 San Felipe, Suite 3700,
Houston, TX 77057. In addition, the execution of a proxy solicited by the
Company in connection with the 2000 Annual Meeting of Shareholders shall confer
on the designated proxyholder discretionary voting authority to vote on any
shareholder proposal which is not included in the Company's proxy materials for
such meeting and for which the Company has not received notice before February
13, 2000.
________________
THE COMPANY WILL PROVIDE TO EACH PERSON SOLICITED, WITHOUT CHARGE EXCEPT
FOR EXHIBITS, UPON REQUEST IN WRITING, A COPY OF ITS ANNUAL REPORT ON FORM 10-K,
INCLUDING THE FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES, AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE FISCAL YEAR ENDED DECEMBER
31, 1998. REQUESTS SHOULD BE DIRECTED TO CHIEF FINANCIAL OFFICER, DA CONSULTING
GROUP, INC., SAN FELIPE PLAZA, 5847 SAN FELIPE, SUITE 3700, HOUSTON, TX 77057.
By Order of the Board of Directors
/s/Nicholas H. Marriner
------------------------------
Nicholas H. Marriner
Chairman of the Board & Chief Executive Officer
Date: March 29, 1999
Houston, Texas
-15-
<PAGE>
[X] Please mark your
votes as in this
example using dark ink only.
FOR THE WITHHOLD AUTHORITY TO
NOMINEES LISTED VOTE FOR THE NOMINEES
BELOW LISTED BELOW
1. Election of
Directors: [_] [_]
FOR AGAINST ABSTAIN
2. Ratification of appointment
of PricewaterhouseCoopers LLP [_] [_] [_]
as independent accountants
for the Company for the fiscal
year ending December 31, 1999:
Nominees: For a three-year term expiring at the Annual Meeting to be held in
2002: Nigel W.E. Curlet and Gunther E.A. Fritze. For a two-year term expiring at
the Annual Meeting to be held in 2001: Patrick J. Newton. (Instruction: To
withhold authority to vote for any nominee(s), write the name(s) of such
nominee(s) on the line below.)
- -------------------------------------------------------------------------------
_____________________________________________ Date: ______________ , 1999
Signature of Shareholder(s)
NOTE: Please sign this proxy exactly as name(s) appear on your stock
certificate. When signing as attorney-in-fact, executor, administrator, trustee
or guardian, please add your title as such, and if signer is a corporation,
please sign with full corporate name by a duly authorized officer or officers
and affix the corporate seal. Where stock is issued in the name of two (2) or
more persons, all such persons should sign.
<PAGE>
DA CONSULTING GROUP, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FROM HOLDERS OF COMMON STOCK
The undersigned, revoking all previous proxies, hereby appoints Nicholas H.
Marriner and Patrick J. Newton, and each of them acting individually, as the
attorney and proxy of the undersigned, with full power of substitution, to
vote, as indicated below and in their discretion upon such other matters as may
properly come before the meeting, all shares of Common Stock which the
undersigned would be entitled to vote at the Annual Meeting of the Shareholders
of DA Consulting Group, Inc. to be held on May 3, 1999, and at any
adjournment or postponement thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING
AND PROXY STATEMENT.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. UNLESS OTHERWISE
SPECIFIED, THE SHARES WILL BE VOTED "FOR" THE ELECTION OF THE NOMINEES FOR
DIRECTOR LISTED ON THE REVERSE SIDE HEREOF AND "FOR" RATIFICATION OF
APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT
ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1999. THIS PROXY ALSO
DELEGATES DISCRETIONARY AUTHORITY WITH RESPECT TO ANY OTHER BUSINESS WHICH MAY
PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
(PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.)
SEE REVERSE SIDE
