SCHEDULE 14(A)
(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
[ x ] Filed by the Registrant
[ ] 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 by
[ ] Definitive Additional Materials Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
DA CONSULTING GROUP, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) filing Proxy Statement, if Other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ x ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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DA CONSULTING GROUP, INC.
SAN FELIPE PLAZA
5847 SAN FELIPE, SUITE 3700
HOUSTON, TX 77057
__________________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OCTOBER 12, 2000
__________________
To the Shareholders of DA Consulting Group, Inc.:
A special meeting of shareholders (the "Special Meeting") of DA Consulting
Group, Inc, a Texas corporation (the "Company"), will be held at 9:00 a.m.,
local time, on October 12, 2000, at the Company's principal executive offices,
San Felipe Plaza, 5847 San Felipe, Suite 3700, Houston, Texas, for the following
purpose:
To approve the Securities Purchase Agreement (the "Purchase
Agreement") between the Company and Purse Holding Limited, a British
Virgin Islands limited company ("Purse"), dated August 2, 2000,
attached as Annex I to the Proxy Statement, and in connection
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therewith, to approve (i) the issuance to Purse of 2,000,000
shares of common stock, par value $0.01 per share of the Company
(the "Common Stock"), (ii) the issuance to Purse of warrants to
purchase up to 3,000,000 shares of Common Stock (and the
exercisability thereof), and (iii) Board of Directors representation
rights granted to Purse, all as set forth in the Purchase
Agreement, as well as the other provisions thereof.
Only holders of shares of the Common Stock at the close of business on
August 22, 2000, are entitled to notice of, and to vote at, the Special 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
Virginia L. Pierpont
Chairman of the Board
September 11, 2000
<PAGE>
DA CONSULTING GROUP, INC.
SAN FELIPE PLAZA
5847 SAN FELIPE, SUITE 3700
HOUSTON, TX 77057
PROXY STATEMENT
FOR
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON
OCTOBER 12, 2000
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This Proxy Statement and accompanying form of proxy, which are first being
mailed to shareholders on or about September 11, 2000, are being 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 special meeting of
shareholders of the Company (the "Special Meeting"), to be held at 9:00 a.m. on
October 12, 2000, at the Company's principal executive offices, San Felipe
Plaza, 5847 San Felipe, Suite 3700, 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 Special 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 in favor of Proposal 1 as set forth below.
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 Special Meeting.
VOTING
Holders of record of the Company's common stock, par value $0.01 per share
("Common Stock"), on August 22, 2000, will be entitled to vote at the Special
Meeting or any adjournments or postponements thereof. As of that date, there
were 6,418,604 shares of Common Stock outstanding and entitled to vote. Each
share of Common Stock entitles the holder thereof to one vote on any matter that
may properly come before the Special Meeting.
The Nasdaq Stock Market Marketplace Rules (the "Nasdaq Rules") applicable
to the Company require shareholder approval of the matters set forth in Proposal
1 below. Accordingly, under the Nasdaq Rules the minimum vote which will
constitute shareholder approval shall be the affirmative vote of a majority of
the total votes cast on the proposal in person or by proxy at the Special
Meeting. 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,
<PAGE>
are not voted and will therefore have no effect on the outcome of the matters to
be voted upon at the Special Meeting. 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. 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 Special Meeting. The
presence at the Special 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 Proposal 1.
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. If
determined necessary or advisable by the Board of Directors, the Company may
retain a proxy solicitor to perform solicitation services in connection with
this Proxy Statement. 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.
PROPOSAL NO. 1: APPROVAL OF THE SECURITIES PURCHASE AGREEMENT
At the Special Meeting, shareholders will be asked to approve the
Securities Purchase Agreement (the "Purchase Agreement") between the Company and
Purse Holding Limited, a British Virgin Islands limited company ("Purse"), dated
August 2, 2000, attached hereto as Annex I, and in connection therewith to
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approve (i) the issuance to Purse of 2,000,000 shares of Common Stock, (ii) the
issuance to Purse of warrants (the "Warrants") to purchase up to 3,000,000
shares of Common Stock (and the exercisability thereof), and (iii) Board of
Directors representation rights granted to Purse, all as set forth in the
Purchase Agreement, as well as the other provisions thereof.
BACKGROUND
On August 2, 2000, the Company signed a Purchase Agreement relating to the
purchase by Purse of:
- 2,000,000 shares of Common Stock (the "Shares") for $4.8 million; and
- warrants to purchase up to 3,000,000 shares of Common Stock (the
"Warrant Shares").
In addition to other customary conditions to closing, the closing of the
transactions contemplated by the Purchase Agreement has been made contingent
upon shareholder approval.
<PAGE>
The funds from the offering will principally be used to support the
Company's new business development as it expands its current business model.
This includes the development of the Company's web-enabled learning management
solutions, which the Company plans to launch in the fourth quarter of 2000.
According to the terms of the Purchase Agreement, following the Company's
receipt of shareholder approval, the Company will:
- issue and sell to Purse the Shares; and
- issue to Purse warrants to purchase:
- 2,000,000 shares of Common Stock, exercisable for a period of
three years after the closing date of the Purchase Agreement (the
"Closing Date"), at the greater of $3.00 per share or 85% of the
market price of a share of the Common Stock at the time of
exercise; and
- 1,000,000 shares of Common Stock, exercisable for a period
beginning January 2, 2002, and ending on the third anniversary of
the Closing Date, at $3.00 per share.
Both warrants will expire on the third anniversary of the Closing Date. If
Purse's purchase of the Shares would make Purse subject to notification and
reporting requirements of the Hart-Scott-Rodino Antitrust Improvement Act of
1976 ("HSR Act"), then Purse will only be required to purchase the maximum
number of shares that it may purchase without subjecting itself to the HSR Act
requirements. However, if Purse chooses to purchase Shares or Warrant Shares
which subject Purse to the requirements of the HSR Act, then the Company and
Purse have agreed to cooperate in making the required filings and to share the
cost of the filing fees equally.
The Purchase Agreement provides that within one year following closing, the
Company will prepare and file with the Securities and Exchange Commission a
registration statement pursuant to the Securities Act of 1933 so as to register
for resale the Shares and Warrant Shares. The Purchase Agreement further
provides that Purse will be entitled following closing to one seat on the
Company's Board of Directors. During the 180-day period after closing, the
Company will not privately sell any new securities without first offering Purse
the right to purchase the new securities, provided that the aggregate purchase
price of the new securities which Purse will have the right to purchase will not
exceed $5.0 million.
Pending closing, Purse has loaned the Company $2.0 million. This loan is
unsecured and will be credited toward the purchase price of the Shares to be
purchased by Purse at closing. If the Company does not receive shareholder
approval, the loan must be repaid in full not later than 90 days following the
Special Meeting.
<PAGE>
The Nasdaq Rules require shareholder approval of the issuance of a listed
company's common stock in certain circumstances, including issuances of shares
which will result in a change of control of the listed company. Upon the
completion of the transactions contemplated by the Purchase Agreement, Purse
will:
- own 24% of the Company's issued and outstanding shares of Common
Stock;
- control at least one seat on the Company's Board of Directors; and
- have the right to purchase up to an additional 3,000,000 shares of
Common Stock which, if purchased, will result in Purse owning 44% of
the Company's issued and outstanding shares of Common Stock.
As a result, Purse will be in a position to exert substantial influence over the
management and policies of the Company. The Company believes that the
transactions contemplated by the Purchase Agreement could constitute a change of
control under the Nasdaq Rules. Accordingly, the Company is seeking shareholder
approval of the Purchase Agreement and the provisions thereof as set forth
above.
THE BOARD OF DIRECTORS BELIEVES THAT APPROVAL OF PROPOSAL 1 IS IN THE BEST
INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS AND RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR PROPOSAL 1.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of July 31, 2000, with
respect to the beneficial ownership of shares of Common Stock by each person who
is known to the Company to be the beneficial owner of more than five percent of
the outstanding Common Stock, each director, each of the named executive
officers, and all directors and executive officers as a group.
<TABLE>
<CAPTION>
Amount and Nature of Percent of Voting
Name and Address of Beneficial Owner Beneficial Ownership (1) Power
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<S> <C> <C>
EXECUTIVE OFFICERS AND DIRECTORS (2)
Dennis C. Fairchild. . . . . . . . . . . . . --- *
John E. Mitchell . . . . . . . . . . . . . 6,000 *
Nigel W.E. Curlet (3)(4) . . . . . . . . . 31,538 *
Gunther E.A. Fritze (4). . . . . . . . . . 33,658 *
Richard W. Thatcher, Jr. (4) . . . . . . . 92,578 1.4%
Virginia L. Pierpont (5) . . . . . . . . . . 704,468 11.0%
OTHER SHAREHOLDERS
Amicable Discretionary Trust (6)(7). . . . 693,200 10.8%
Worcester Discretionary Trust (6)(8) . . . 631,092 9.8%
Woodbourne Discretionary Trust (6)(8). . . . 629,034 9.8%
Dimensional Fund Advisors, Inc. (9) 485,800 7.6%
All directors and executive officers as a
group ( 6 persons). . . . . . . . . . . . 868,242 13.4%
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* Less than 1%
<FN>
(1) Each beneficial owner's percentage ownership is determined by assuming that
options that are held by such person (but not those held by any other person)
and that are exercisable within 60 days of July 31, 2000, have been exercised.
Options that are not exercisable within 60 days of July 31, 2000, have been
excluded. Unless otherwise noted, the Company believes that all persons named
in the above table have sole voting and investment power with respect to all
shares of Common Stock beneficially owned by them.
(2) The address of each of these people is: c/o DA Consulting Group, Inc., San
Felipe Plaza, 5847 San Felipe, Suite 3700, Houston, TX 77057.
(3) Includes 11,130 shares owned by Mr. Curlet's spouse and 1,450 shares
owned by his son.
(4) Includes 18,958 shares that may be acquired upon the exercise of stock
options.
<PAGE>
(5) Includes (i) 370,000 shares owned by Ms. Pierpont's spouse, Nicholas H.
Marriner, the former chairman of the Company, (ii) 4,200 shares held by Ms.
Pierpont as custodian for three minors, and (iii) 1,025 shares that may be
acquired upon the exercise of stock options.
(6) John Andrew Cowan and Roger Geoffrey Barrs are the co-trustees of each of
these trusts. 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. The address of these shareholders is c/o
DA Consulting Group, Inc., San Felipe Plaza, 5847 San Felipe, Suite 3700,
Houston, TX 77057.
(7) 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.
(8) 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.
(9) The address of this shareholder is 1299 Ocean Avenue, Eleventh Floor, Santa
Monica, CA 90401.
</TABLE>
OTHER BUSINESS
The Board of Directors knows of no other matters that will be presented at
the Special Meeting other than as set forth in this Proxy Statement. However,
if any matter properly comes before the meeting, or any adjournment or
postponement thereof, it is intended that proxies in the accompanying form will
be voted, to the extent permitted by applicable law, in accordance with the
judgment of the persons named therein.
<PAGE>
SHAREHOLDER PROPOSALS
To be eligible for inclusion in the Company's proxy materials for the 2001
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 December
29, 2000, 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 2001 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 March 14,
2001.
By Order of the Board of Directors
Virginia L. Pierpont
Chairman of the Board
Date: September 11, 2000
Houston, Texas
<PAGE>
INDEX TO ANNEX I
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Page
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ANNEX I: Securities Purchase Agreement . . . . . . . . . . . . . . . I-1
Exhibit A: Form of Promissory Note . . . . . . . . . . . . A-1
Exhibit B: Form of the Initial Warrant . . . . . . . . . . B-1
Exhibit C: Form of the Second Warrant . . . . . . . . . . C-1
<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 Virginia L.
Pierpont and John E. Mitchell, and each of them acting individually, as the
attorney and proxy of the undersigned, with full power of substitution, to vote
all shares of common stock, par value $0.01 per share, of the Company (the
"Common Stock") which the undersigned would be entitled to vote at the Special
Meeting of the Shareholders of DA Consulting Group, Inc. to be held on October
12, 2000, and at any adjournment or postponement thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. UNLESS
OTHERWISE SPECIFIED, THE SHARES WILL BE VOTED "FOR" APPROVAL OF PROPOSAL 1
ON THE REVERSE SIDE. 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.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF SPECIAL
MEETING AND PROXY STATEMENT.
(continued on reverse side)
Please date, sign and mail your proxy card back as soon as possible!
Special Meeting of Shareholders
DA CONSULTING GROUP, INC.
October 12, 2000
Please Detach and Mail in the Envelope Provided.
Please mark your votes as in the example. [_]
1. Approval of the Securities Purchase Agreement (the "Purchase Agreement")
between the Company and Purse Holding Limited, a British Virgin Islands limited
company ("Purse"), dated August 2, 2000, attached as Annex I to the Proxy
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Statement, and in connection therewith, approval of (i) the issuance to Purse of
2,000,000 shares of Common Stock, (ii) the issuance to Purse of warrants to
purchase up to 3,000,000 shares of Common Stock (and the exercisability
thereof), and (iii) Board of Directors representation rights granted to Purse,
all as set forth in the Purchase Agreement, as well as the other provisions
thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
______________________________________
Signature of Shareholder
Date: ________________, 2000 ______________________________________
Signature of Shareholder
NOTE: PLEASE SIGN THIS PROXY EXACTLY AS NAME(S) APPEARS 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>
