<PAGE>
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
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Braun Consulting, 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(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.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
BRAUN CONSULTING, INC.
30 West Monroe, Suite 300
Chicago, Illinois 60603
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held December 15, 2000
To the Stockholders of Braun Consulting, Inc.:
Notice is hereby given that the annual meeting of stockholders (the "Annual
Meeting") of Braun Consulting, Inc. (the "Company") will be held at The Mid-
Day Club, One Bank One Plaza, 10 S. Dearborn Street, Floor 56, Chicago,
Illinois 60603, at 8:30 a.m., Central time, on Friday, December 15, 2000, for
the following purposes:
1. To elect three directors to the Board of Directors.
2. To approve the Braun Consulting, Inc. 2001 Employee Stock Purchase
Plan, as more fully set forth under "Proposal No. 2."
3. To approve the appointment of Deloitte & Touche LLP as independent
public accountants for 2000.
4. To transact such other business as may properly come before the
Annual Meeting, or any adjournment or adjournments thereof.
Stockholders of record at the close of business on November 3, 2000 will be
entitled to notice of and to vote at the Annual Meeting, or any adjournment or
adjournments thereof. You are cordially invited to attend the Annual Meeting
in person. Even if you plan to attend the Annual Meeting, you are requested to
mark, sign, date and mail promptly the enclosed proxy for which a return
envelope is provided.
By Order of the Board of Directors
Gregory A. Ostendorf, Secretary
Chicago, Illinois
November 15, 2000
WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE ANNUAL MEETING, YOU ARE URGED
TO MARK, SIGN, DATE AND MAIL PROMPTLY THE ENCLOSED PROXY. IF YOU ATTEND
THE ANNUAL MEETING, YOU CAN VOTE EITHER IN PERSON OR BY YOUR PROXY.
<PAGE>
BRAUN CONSULTING, INC.
30 West Monroe, Suite 300
Chicago, Illinois 60603
PROXY STATEMENT
SOLICITATION AND REVOCABILITY OF PROXIES
This Proxy Statement and accompanying proxy card are furnished in
connection with the solicitation of proxies on behalf of the Board of
Directors of Braun Consulting, Inc., a Delaware corporation ("Braun
Consulting" or the "Company"), for use at the annual meeting of stockholders
to be held on Friday, December 15, 2000, at The Mid-Day Club, One Bank One
Plaza, 10 S. Dearborn Street, Floor 56, Chicago, Illinois 60603, at 8:30 a.m.,
Central time, or at any adjournment or adjournments thereof (such meeting or
adjournment(s) thereof referred to as the "Annual Meeting"). Copies of the
Proxy Statement and the accompanying proxy card are being mailed to
stockholders on or about November 15, 2000.
In addition to solicitation by mail, solicitation of proxies may be made by
personal interview, special letter, telephone or telecopy by regular employees
of the Company. Brokerage firms will be requested to forward proxy materials
to beneficial owners of shares registered in their names and will be
reimbursed for their reasonable expenses. The cost of solicitation of proxies
will be paid by the Company.
A proxy received by the Board of Directors of the Company may be revoked by
the stockholder giving the proxy at any time before it is exercised. A
stockholder may revoke a proxy by notification in writing to the Company at 30
West Monroe, Suite 300, Chicago, Illinois 60603, Attention: Corporate
Secretary. A proxy may also be revoked by execution of a proxy bearing a later
date or by attendance at the Annual Meeting and voting by ballot. A proxy in
the form accompanying this Proxy Statement, when properly executed and
returned, will be voted in accordance with the instructions contained therein.
A proxy received by management which does not withhold authority to vote or on
which no specification has been indicated will be voted FOR the election as
directors of the nominees listed therein, FOR the other proposals set forth in
this Proxy Statement, and in the discretion of the persons named in the proxy
in connection with any other business that may properly come before the Annual
Meeting. A majority of the outstanding shares will constitute a quorum at the
Annual Meeting. Information regarding the vote required for approval of
particular matters is set forth in the discussion of those matters appearing
elsewhere in this Proxy Statement. Abstentions and broker non-votes are
counted for purposes of determining the presence or absence of a quorum for
the transaction of business.
COMMON STOCK OUTSTANDING AND PRINCIPAL HOLDERS THEREOF
The Board of Directors has fixed the close of business on November 3, 2000
as the record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting. At that date there were outstanding
20,210,817 shares of common stock, par value $0.001 per share ("Common
Stock"), of the Company and the holders thereof will be entitled to one vote
for each share of Common Stock held of record by them on that date for each
proposal to be presented at the Annual Meeting.
1
<PAGE>
The following table sets forth information with respect to the shares of
Common Stock (the only outstanding class of voting securities of the Company)
owned of record and beneficially as of November 3, 2000, unless otherwise
specified, by (i) all persons known to possess voting or dispositive power
over more than 5% of the Common Stock, (ii) each director and named executive
officer, and (iii) all directors and executive officers of the Company as a
group:
<TABLE>
<CAPTION>
Amount and Nature of Percentage
Beneficial Ownership of Class
-------------------- ----------
<S> <C> <C>
Putnam Investments, Inc.(1)................... 1,003,200 6.1%
One Post Office Square
Boston, Massachusetts 02109
Steven J. Braun(2)............................ 8,730,247 43.2%
Thomas J. Duvall(3)........................... 101,082 *
Michael J. Evanisko(4)........................ 533,930 2.6%
James M. Kalustian(5)......................... 399,694 2.0%
Stephen J. Miller(6).......................... 746,023 3.7%
Norman R. Bobins(7)........................... 4,000 *
William M. Conroy(8).......................... 4,000 *
William H. Inmon(9)........................... 4,000 *
Eric V. Schultz(10)........................... 16,000 *
All directors and executive officers as a
group (14 persons)........................... 11,311,246 55.1%
</TABLE>
--------
* Represents less than one percent of the total.
(1) Based on a filing made with the Securities and Exchange Commission
reflecting ownership of Common Stock as of December 31, 1999. Putnam
Investments, Inc., which is a wholly-owned subsidiary of Marsh & McLennan
Companies, Inc., wholly owns two registered investment advisers: Putnam
Investment Management, Inc., which is the investment adviser to the
Putnam family of mutual funds, and The Putnam Advisory Company, Inc.,
which is the investment adviser to Putnam's institutional clients.
According to a Schedule 13G filed with the Securities and Exchange
Commission by Putnam Investments, Inc., it has, with its affiliates,
shared voting power with respect to 404,300 shares and shared dispositive
power with respect to 1,003,200 shares.
(2) Includes an aggregate of 233,330 shares held in trust for Mr. Braun's
children.
(3) Includes 34,208 shares of Common Stock issuable upon exercise of
outstanding stock options that will become exercisable within 60 days of
November 3, 2000.
(4) Includes 31,449 shares of Common Stock issuable upon exercise of
outstanding stock options that will become exercisable within 60 days of
November 3, 2000.
(5) Includes an aggregate of 130,000 shares of Common Stock held by a family
limited partnership of which Mr. Kalustian is the general partner and
11,344 shares of Common Stock issuable upon exercise of outstanding stock
options that will become exercisable within 60 days of November 3, 2000.
(6) Includes an aggregate of 6,000 shares of Common Stock held in trust for
Mr. Miller's children.
(7) Includes 4,000 shares of Common Stock issuable upon exercise of
outstanding stock options that will become exercisable within 60 days of
November 3, 2000.
(8) Includes 4,000 shares of Common Stock issuable upon exercise of
outstanding stock options that will become exercisable within 60 days of
November 3, 2000.
(9) Includes 4,000 shares of Common Stock issuable upon exercise of
outstanding stock options that will become exercisable within 60 days of
November 3, 2000.
(10) Includes 4,000 shares of Common Stock issuable upon exercise of
outstanding stock options that will become exercisable within 60 days of
November 3, 2000.
2
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers to
file with the Securities and Exchange Commission initial reports of ownership
and reports of changes in ownership of Common Stock. Based solely on a review
of the copies of such reports furnished to the Company and written
representations that no other reports were required, the Company believes that
all its directors and executive officers during 1999 complied on a timely
basis with all applicable filing requirements under Section 16(a) of the
Exchange Act, except as set forth below. Each of Messrs. Bobins, Conroy, Inmon
and Schultz filed late his Form 3. Mr. Bascobert filed late two Form 4s, each
reporting one transaction. Each of Messrs. Braun, Duvall, Evanisko, Fenner,
Kalustian, Miller and Sellke filed late one Form 4, each reporting one
transaction.
PROPOSAL NO. 1--ELECTION OF DIRECTORS
General
The Board of Directors consists of nine directors divided into three
classes, denominated Class I, Class II and Class III. Members of each class
hold office for three-year terms which are staggered. As of November 2, 2000,
the members of the classes of the Board of Directors were realigned to more
evenly allocate the independent directors and the members of the Audit
Committee between the classes. Messrs. Evanisko, Kalustian and Schultz are
Class I directors whose terms expire at the Annual Meeting and who are
nominees for director. Messrs. Bobins, Conroy and Duvall are Class II
directors whose terms expire at the 2001 annual meeting of stockholders.
Messrs. Braun, Inmon and Miller are Class III directors whose terms expire at
the 2002 annual meeting of stockholders. The employment agreements for Messrs.
Duvall, Evanisko and Kalustian provide for their nominations as our directors.
Three directors, Messrs. Evanisko, Kalustian and Schultz, are nominated to
be elected at the Annual Meeting. Each nominee is currently a director of the
Company. The persons named as proxy holders in the accompanying proxy intend
to vote each properly signed and submitted proxy FOR the election as a
director of each of the persons named as a nominee below under "Nominees for
Director" unless authority to vote in the election of directors is withheld on
such proxy. The directors will be elected to hold office until the 2003 annual
meeting of stockholders or until their successors are elected and qualified.
If, for any reason, at the time of the election one or more of the nominees
should be unable to serve, the proxy will be voted for a substitute nominee or
nominees selected by the Board of Directors. In accordance with the Company's
Bylaws, the directors will be elected by a plurality of votes cast at the
Annual Meeting. Abstentions and broker non-votes will not be taken into
account in determining the outcome of the election.
The Company recommends voting "For" the nominees.
The following table sets forth, as of November 3, 2000, the name, age and
principal position of each director:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<C> <C> <S>
Nominees for Director:
Executive Vice President
Michael J. Evanisko..................................... 50 and Director
Executive Vice President
James M. Kalustian...................................... 40 and Director
Eric V. Schultz......................................... 39 Director(1) (2)
Directors Whose Terms Expire at the 2001 Annual Meeting:
Norman R. Bobins........................................ 57 Director(1) (2)
William M. Conroy....................................... 41 Director
Thomas J. Duvall........................................ 50 Chief Operating Officer,
Executive Vice President
and Director
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<C> <C> <S>
Directors Whose Terms Expire at the 2002 Annual Meeting:
Steven J. Braun......................................... 40 President, Chief
Executive Officer and
Chairman of the Board of
Directors
William H. Inmon........................................ 55 Director
Stephen J. Miller....................................... 49 Executive Vice President
and Director
</TABLE>
--------
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
Michael J. Evanisko. Mr. Evanisko has served as an Executive Vice President
and a director since May 1999. Mr. Evanisko was a founder and President of
Vertex Partners, Inc. Prior to co-founding Vertex Partners, Inc. in 1994, Mr.
Evanisko was a founder and Vice President in Corporate Decisions, Inc., a
strategic consulting firm, from 1983 to 1993. Mr. Evanisko was a consultant
and manager at Bain & Co. from 1980 to 1983. In addition to his consulting
career, Mr. Evanisko served as Chairman of Digitrace Care Services, Inc. from
1990 to 1996 and Elensys, Inc. from 1993 to present. Mr. Evanisko also serves
as President of The Partnership for Organ Donation, Inc. Mr. Evanisko has a
B.A. and an M.P.A. from Pennsylvania State University and an M.A. and an
M.Phil. from Yale University.
James M. Kalustian. Mr. Kalustian has served as an Executive Vice President
and a director since May 1999. Mr. Kalustian was a founder and Vice President
of Vertex Partners, Inc. Prior to co-founding Vertex Partners, Inc. in 1994,
Mr. Kalustian was a Manager at Corporate Decisions, Inc. from 1989 to 1994.
Mr. Kalustian served in various marketing positions from 1982 to 1989 for
Raytheon Company, W.R. Grace & Co. and Canada Dry. Mr. Kalustian has an A.B.
from Harvard College and an M.B.A. from Northwestern University.
Eric V. Schultz. Mr. Schultz was appointed as an independent director of
Braun Consulting in August 1999. Mr. Schultz is currently serving as Chairman
and CEO of Wireless Knowledge, a joint venture between Microsoft Corporation
and Qualcomm, and has been with Wireless Knowledge since December 1999. Prior
to joining Wireless Knowledge, Mr. Schultz served as Director of Wireless
Strategy and Sales in the Commerce and Consumer Group of Microsoft Corporation
from 1998 to 1999. From 1989 to 1998, Mr. Schultz served as CEO and a director
of The MESA Group, Inc.
Norman R. Bobins. Mr. Bobins was appointed as an independent director of
Braun Consulting in August 1999. Mr. Bobins is currently serving as President
and CEO of LaSalle Bank National Association, and has served in various
capacities at LaSalle Bank National Association or its predecessors since
April 1981. Mr. Bobins also currently serves as a director of ABN AMRO Bank
Canada, CenterPoint Properties Trust, Chicago Title & Trust Co., Federal Home
Loan Bank of Chicago, RREEF America REIT II, Inc. and Transco, Inc.
William M. Conroy. Mr. Conroy was appointed as an independent director of
Braun Consulting in August 1999. Mr. Conroy is currently a partner with
Insight Capital Group and has been with Insight since September 2000. Based in
New York, Insight is a global private equity firm that invests in the
information technology industry. Mr. Conroy's role with Insight is to provide
in-depth operational assistance to Insight's portfolio companies. Prior to
joining Insight, Mr. Conroy served as Executive Vice President and COO of
TenFold Corporation. Mr. Conroy was with TenFold Corporation from November
1997 to August 2000. Prior to joining TenFold Corporation, Mr. Conroy served
in various capacities at Oracle Corporation from 1986 to 1997. Mr. Conroy was
Area Vice President of Oracle Corporation from 1990 to 1995, and was Group
Vice President from 1996 to 1997. Mr. Conroy also serves as a director of
IKANO Communications.
Thomas J. Duvall. Mr. Duvall has served as Chief Operating Officer, an
Executive Vice President and a director since November 1998. Prior to joining
Braun Consulting, Mr. Duvall was a Management Consulting Partner at
PricewaterhouseCoopers LLP where he was responsible for the Chicago office
consulting practice and for PricewaterhouseCoopers LLP's nationwide Chemical
Industry consulting practice. Mr. Duvall spent more than 23 years at
PricewaterhouseCoopers LLP, including the last 12 years as a Partner of the
firm. Mr. Duvall has a B.S. from Indiana Central College and an M.B.A. from
State University of New York at Buffalo.
4
<PAGE>
Steven J. Braun. Mr. Braun founded Braun Consulting in 1990 and has served
as President, Chief Executive Officer and Chairman of the Board of Directors
since the Company's inception. Mr. Braun began his entrepreneurial activities
in 1985 when he co-founded Shepro Braun Consulting, a professional services
practice dedicated to business and information technology solutions. Mr. Braun
joined Price Waterhouse LLP in 1982 as a consultant after he earned an A.B.
from Harvard College.
William H. Inmon. Mr. Inmon was appointed as an independent director of
Braun Consulting in August 1999. Mr. Inmon is currently a partner in
BillInmon.com. From 1995 to 2000, Mr. Inmon served as Chief Technology Officer
of Ambeo, Inc. From 1990 to 1996, Mr. Inmon served as Executive Vice President
and as a director of Prism Solutions, Inc. Mr. Inmon also currently serves as
a director of Ambeo, Inc.
Stephen J. Miller. Mr. Miller has served as an Executive Vice President and
a director since May 1999. Mr. Miller was a founding member of Braun
Consulting and has been part of the senior management team since 1993. Mr.
Miller has worked in the information technology consulting marketplace for the
past 20 years, specializing in database management and business intelligence.
Mr. Miller has a B.A. from The Johns Hopkins University and an M.S. from the
University of Illinois.
Meetings and Committees of the Board of Directors
The Board of Directors has an Audit Committee and a Compensation Committee,
the members of which are independent as defined by the Nasdaq listing
standards. The Audit Committee, which was composed of Norman R. Bobins and
Eric V. Schultz in 1999, did not meet during fiscal year 1999. The Board of
Directors adopted an Audit Committee Charter effective June 2000. The Audit
Committee's responsibilities are to: (1) recommend to the Board of Directors
the independent auditors to be retained; (2) evaluate, together with the Board
and management, the performance of the independent auditors; (3) obtain
annually from the independent auditors a formal written statement describing
all relationships between the auditors and the Company, consistent with
Independence Standards Board Standard No. 1; (4) review the audited financial
statements and discuss them with management and the independent auditors; (5)
issue annually a report to be included in the Company's proxy statement as
required by the rules of the Securities and Exchange Commission; (6) oversee
internal audit activities and the relationship with the independent auditors;
and (7) discuss with management and/or the Company's general counsel any legal
matters (including the status of pending litigation) that may have a material
impact on the Company's financial statements, and any material reports or
inquiries from regulatory or governmental agencies.
The Compensation Committee, which is composed of Norman R. Bobins and Eric
V. Schultz, held one meeting during the last fiscal year. The Compensation
Committee sets the compensation of the Chief Executive Officer and approves
the compensation of the Company's executive officers. The Compensation
Committee also administers the 1998 Employee Long Term Stock Investment Plan,
the 1998 Executive Long Term Stock Investment Plan and the 1995 Director Stock
Option Plan. The Board does not have a standing nominating committee or other
committee performing a similar function.
During 1999, the Board of Directors held two meetings. During 1999, all
members of the Board of Directors, except William M. Conroy, attended at least
75% of the total of all Board meetings and applicable committee meetings.
Director Compensation
Directors who are also employees of the Company receive no additional
compensation for their services as directors. Directors who are not employees
of the Company receive a $1,000 fee for attendance in person at meetings of
the Board or committees of the Board and are reimbursed for travel expenses
and other out-of-pocket costs incurred in connection with their attendance at
such meetings. Non-employee directors receive stock
5
<PAGE>
options as an additional component of compensation pursuant to the 1999
Independent Director Long Term Stock Investment Plan. Directors who are
employees of the Company are eligible to participate in the Company's 1998
Employee Long Term Stock Investment Plan, 1998 Executive Long Term Stock
Investment Plan and 1995 Director Stock Option Plan.
Executive Officers
The following table sets forth, as of November 3, 2000, the names, ages and
positions of the persons who are not directors and who are executive officers
of the Company:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
John C. Burke................ 62 Chief Financial Officer and Treasurer
Paul J. Bascobert............ 36 Senior Vice President
Curt S. Sellke............... 41 Chief People Officer and Senior Vice President
Thomas A. Schuler............ 39 Vice President of Corporate Development
Gregory A. Ostendorf......... 45 General Counsel and Secretary
</TABLE>
John C. Burke. Mr. Burke has served as Chief Financial Officer and
Treasurer since May 1996. Prior to joining Braun Consulting, Mr. Burke was
with the public accounting firm of Grant Thornton LLP for 30 years. Mr. Burke
served as a member of senior management of Grant Thornton LLP for 20 years and
held the positions of Chairman of the firm and Chicago Area Managing Partner.
Mr. Burke is a C.P.A. and has a B.S. from the University of Notre Dame.
Paul J. Bascobert. Mr. Bascobert has served as a Senior Vice President
since May 1999. Mr. Bascobert was a Vice President and founding member of
Vertex Partners, Inc. Prior to joining Vertex Partners, Inc. in 1994, Mr.
Bascobert was with Corporate Decisions, Inc. from 1992 to 1994. Mr. Bascobert
held the position of systems engineer for General Motors and Whirlpool
Corporation from 1982 to 1990. Mr. Bascobert has a B.S.E.E. from Kettering
University and an M.B.A. from the University of Pennsylvania.
Curt S. Sellke. Mr. Sellke is Chief People Officer and a Senior Vice
President and has been with Braun Consulting since May 1994. Prior to joining
Braun Consulting, Mr. Sellke was the District Manager for Professional
Services at Sybase from 1991 to 1994. Mr. Sellke has 19 years of information
systems experience and has worked in a similar capacity for Oracle
Corporation, Bricker & Associates, The Whitewater Group and Baxter Healthcare.
Mr. Sellke has a B.B. from Western Illinois University and an M.S. in Computer
Science from DePaul University.
Thomas A. Schuler. Mr. Schuler has served as Vice President of Corporate
Development since November 1998. Prior to joining Braun Consulting, Mr.
Schuler was Vice President of Development for Professional Dental Associates
from 1997 to 1998. Prior to joining Professional Dental Associates, Mr.
Schuler was employed by Oxford Resources as Senior Vice President of Funding,
from 1995 to 1996. From 1984 to 1995, Mr. Schuler held various investment
banking positions for State Street Bank, Blalack-Loop and Lehman Brothers. Mr.
Schuler has an A.B. from Harvard College and an M.B.A. from the University of
California at Los Angeles.
Gregory A. Ostendorf. Mr. Ostendorf has served as General Counsel since
August 1996 and Secretary since October 1996. Prior to joining Braun
Consulting, Mr. Ostendorf was a partner in the law firm of Cage, Hill &
Niehaus from 1988 to 1996. Mr. Ostendorf has a B.S. from Western Kentucky
University and a J.D. from Indiana University.
Except for Messrs. Duvall, Evanisko, Kalustian and Bascobert, each of whom
has an employment agreement, the executive officers of the Company are
appointed annually by, and serve at the discretion of, the Board of Directors.
Mr. Ostendorf is the brother-in-law of Mr. Braun. There are no other family
relationships between any of the Company's directors or executive officers.
See "Employment Agreements."
6
<PAGE>
Certain Relationships and Related Transactions
Vertex Registration Rights Agreement. In connection with the acquisition of
Vertex Partners, Inc. in May 1999, Braun Consulting entered into a
registration rights agreement with Messrs. Evanisko, Kalustian and Bascobert,
who are collectively referred to as the Holders. Under the terms of the
registration rights agreement, the Holders are entitled to piggyback
registration rights with respect to the shares of Common Stock owned by them.
Each time the Company proposes to register any of its securities under the
Securities Act of 1933, as amended (the "Securities Act"), whether for the
Company's account or for other stockholders, the Holders are entitled to have
their shares of Common Stock registered by the Company as well, unless the
Company is registering its securities on Form S-4 or Form S-8. These
registration rights are subject to conditions and limitations, including the
right of underwriters of an offering to limit the number of shares included in
the registration. The Company must pay expenses related to the registration
and distribution of the shares of Common Stock held by the Holders under the
registration rights agreement.
Stockholders Agreement. Mr. Braun and Mr. Miller are parties to an
agreement providing that if Mr. Braun sells any of his shares of the Common
Stock to a third party during the term of the agreement, then Mr. Miller has
the option to sell the same percentage of his shares to the same purchaser for
the same price per share and on the same terms as Mr. Braun's sale. In
addition, the agreement permits Mr. Miller to participate on the same terms as
Mr. Braun in any sale of the Common Stock registered under the Securities Act.
The agreement terminates upon the termination of Mr. Miller's employment with
the Company.
Other Transactions. In November 1998, Braun Consulting made an unsecured
loan to Mr. Miller in the amount of $29,128, with interest accruing at an
annual interest rate of 7.75%, in connection with the exercise of stock
options. The note matured upon the completion of the Company's initial public
offering in August 1999. In January 1999, Braun Consulting made an unsecured,
interest-free loan to Mr. Miller in the amount of $180,594 to fund the
withholding of taxes due in connection with the exercise of stock options.
This loan matured upon the completion of the Company's initial public offering
in August 1999. Mr. Miller used a portion of the proceeds from his sale of
shares of the Common Stock in the Company's initial public offering to repay
the notes in August 1999.
In January 1999, Braun Consulting made an unsecured loan to Mr. Sellke in
the amount of $67,800 to fund the withholding of taxes due in connection with
the exercise of stock options. In April 1999, Braun Consulting made an
unsecured loan to Mr. Sellke in the amount of $65,595, to fund the withholding
of taxes due in connection with the exercise of stock options. The loans bear
interest at 8.0%, are payable on demand and matured on December 31, 1999. In
September 1999, Mr. Sellke used a portion of the proceeds from his sale of
shares of the Common Stock in the Company's initial public offering to repay
the entire January 1999 note and $35,595 of the April 1999 note. Mr. Sellke
repaid an additional $24,848 of the April 1999 note in December 1999 and
repaid the remaining portion of the April 1999 note in February 2000.
In January 1999, Braun Consulting made an unsecured loan to Mr. Fenner in
the amount of $36,855 to fund the withholding of taxes due in connection with
the exercise of stock options. In April 1999, Braun Consulting made an
unsecured loan to Mr. Fenner in the amount of $227,736 to fund the withholding
of taxes due in connection with the exercise of stock options. The loans bear
interest at 8.0%, are payable on demand and mature on December 31, 1999. Mr.
Fenner used a portion of the proceeds from his sale of shares of the Common
Stock in the Company's initial public offering to repay the notes in September
1999.
In December 1998, Braun Consulting executed a short-term demand note in
favor of Mr. Braun in the amount of $150,000 at an interest rate of 8.0%. This
note was repaid in January 1999.
Compensation Committee Report
The Compensation Committee of the Company (the "Committee") is responsible
for establishing the level of base salary payable and for approving any
individual incentive program to be in effect for the Chief Executive
7
<PAGE>
Officer. The Chief Executive Officer has the authority to establish the level
of base salary payable and for approving the incentive programs to be in
effect each fiscal year for all other employees of the Company, including the
executive officers, subject to approval of the Committee.
General Compensation Policy. The Company's fundamental compensation
philosophy is to offer senior management competitive compensation
opportunities based upon the Company's performance and the individual's
personal performance. All employees, including senior management, are
evaluated on a measure of contribution to the Company and achievement of other
objectives. The percentage of total cash compensation in cash incentives and
bonuses is typically much higher for members of senior management than for
other employees. The compensation packages of most members of senior
management consist of (a) base salary, (b) cash incentives or bonus, and (c)
long-term stock-based incentive awards.
Base Salary. The base salaries of senior management, including the
executive officers, are set on the basis of salary levels of comparable
positions at organizations that compete with the Company for management talent
and individual personal performance. Information relative to comparable salary
levels is garnered from a number of sources, including market compensation
studies from established compensation consultants.
Cash Incentives. Each member of senior management, including the executive
officers, but excluding the Chief Executive Officer, has an established cash
incentive or bonus target. The actual payment of cash incentives or bonuses is
determined on the basis of the degree of achievement of certain Company
performance and individual personal performance goals set prior to the
beginning of each fiscal year. The nature of the cash incentive target, the
nature of the goals, and the timing of the payment of awards vary based upon
the responsibilities of the particular member of the senior management team.
Long Term Incentive Compensation. Since August 10, 1999, the Committee has
made no option grants to the executive officers; however, it is contemplated
that certain executive officers will receive option grants prior to the end of
fiscal year 2000. Option grants are typically made (a) on an annual basis to
employees based on their contribution and performance during the fiscal year,
and (b) to certain experienced new hires. Generally, the size of the grants
are set at levels the Committee deems appropriate to create meaningful
opportunity for stock ownership, and are based on the individual's
responsibilities and performance, and the total number of option shares.
Chief Executive Officer Compensation. The annual base salary for Mr. Braun,
the Chief Executive Officer of the Company, was established by the Board of
Directors in 1995, and has not been adjusted since that time. Mr. Braun did
not have a bonus program in fiscal year 1999, and he does not have a bonus
program in fiscal year 2000. No option grants were made to Mr. Braun in fiscal
1999 and there are no option grants to Mr. Braun contemplated in fiscal year
2000.
MEMBERS OF THE COMMITTEE
Norman R. Bobins
Eric V. Schultz
Compensation Committee Interlocks and Insider Participation
Mr. Braun served as the sole member of the Compensation Committee during
1999 until the completion of the Company's initial public offering in August
1999. Messrs. Bobins and Schultz now serve as the members of the Compensation
Committee. Neither of these two directors have at any time been officers or
employees of Braun Consulting and neither of these two directors serves as a
member of the board of directors or compensation committee of any entity that
has one or more executive officers serving as a member of the Company's Board
of Directors or Compensation Committee.
8
<PAGE>
Executive Compensation
The following table sets forth certain summary information concerning the
compensation earned during 1998 and 1999 by the Company's President and Chief
Executive Officer and the four other most highly compensated officers. We use
the term "named executive officers" to refer to these people in this proxy
statement. The table excludes certain perquisites and other personal benefits
received by a named executive officer that do not exceed the lesser of $50,000
or 10% of any such officer's salary and bonus disclosed in the table.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
Annual ------------
Compensation Securities
Name and Principal ----------------- Underlying All Other
Position Year Salary Bonus Options Compensation(1)
------------------ ---- -------- -------- ------------ ---------------
($) ($) (#) ($)
<S> <C> <C> <C> <C> <C>
Steven J. Braun........... 1999 $333,333 -- -- $2,400
President and Chief 1998 333,333 $65,000 -- 2,000
Executive Officer
Thomas J. Duvall.......... 1999 315,000 57,250 3,500 2,297
Chief Operating Officer 1998 50,000 -- 333,330 --
and Executive Vice
President
Michael J. Evanisko....... 1999 278,333 150,000 62,899 1,159(2)
Executive Vice President 1998 220,000 44,200 49,314 1,600
Stephen J. Miller......... 1999 250,000 43,650 -- 3,322
Executive Vice President 1998 200,000 69,244 -- 2,083
James M. Kalustian........ 1999 231,667 100,000 45,374 1,600
Executive Vice President 1998 180,000 20,104 -- 1,518
</TABLE>
--------
(1) Represents 401(k) matching contributions by the Company.
(2) Amount was reduced by $441 to reflect an overpayment in 1998.
The following table sets forth information on grants of stock options
during 1999 to the named executive officers.
Option Grants in 1999
<TABLE>
<CAPTION>
Individual Grants
-----------------------------------------------
Potential
Realizable Value
at Assumed
Number of Percent of Annual Rates of
Securities Total Stock Price
Underlying Options Appreciation for
Options Granted to Option Term(2)
Granted in Employees Exercise Price Expiration ----------------
Name 1999 in 1999 (per share)(1) Date 5% 10%
---- ---------- ---------- -------------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Steven J. Braun......... -- -- -- -- -- --
Thomas J. Duvall........ 3,500 0.2% $7.00 8/2006 $ 9,974 $ 23,244
Michael J. Evanisko..... 1,700 0.1 7.00 8/2006 4,844 11,290
61,199 3.8 3.95 5/2004 66,787 147,582
Stephen J. Miller....... -- -- -- -- -- --
James M. Kalustian...... 1,700 0.1 7.00 8/2006 4,844 11,290
43,674 2.7 3.95 5/2004 47,662 105,320
</TABLE>
--------
(1) The exercise price equals the fair market value of the Common Stock as of
the grant date.
(2) The potential realizable value is calculated based on the term of the
option at the time of grant. Assumed stock price appreciation of 5% and
10% is based on the fair value at the time of the grant.
9
<PAGE>
The following table sets forth information with respect to exercises of
options by the named executive officers during 1999 pursuant to the 1998
Employee Long Term Stock Investment Plan, the 1998 Executive Long Term Stock
Investment Plan and the 1995 Director Stock Option Plan, and information with
respect to unexercised options to purchase Common Stock held by them at
December 31, 1999.
Aggregated Option Exercises in 1999 and Year-End 1999 Option Values
<TABLE>
<CAPTION>
Number Number of Securities
of Underlying Unexercised Value of Unexercised In-
Shares Options Held at the-Money Options at
Acquired December 31, 1999 December 31, 1999(1)
On Value ------------------------- -------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Steven J. Braun......... -- -- -- -- -- --
Thomas J. Duvall........ 66,666 $1,791,649 -- 270,164 -- $18,506,234
Michael J. Evanisko..... -- -- 15,299 47,600 $1,033,447 3,210,195
Stephen J. Miller....... -- -- -- -- -- --
James M. Kalustian...... -- -- 10,918 34,456 737,511 2,322,318
</TABLE>
--------
(1) Calculated based on the fair market value of the Common Stock at December
31, 1999 of $71.50, minus the per share exercise price, multiplied by the
number of shares of Common Stock underlying the options.
10
<PAGE>
Performance Graph
The followng performance graph compares the cumulative total stockholder
return on the Common Stock to the cumulative total returns of the Russell 2000
Index and the Company's peer group since the date the Common Stock began
trading on the Nasdaq National Market (August 10, 1999). The graph assumes
that the value of the investment in the Common Stock and each index was $100
as of August 10, 1999 and that all dividends were reinvested on a quarterly
basis.
[LINE CHART]
Date BRNC Peer Group Russell 2000
---- ---- ---------- ------------
19990810 100 100 100.00
19990831 154.8673 127.0326 101.1849
19990930 235.3982 161.2673 101.0596
19991029 385.8407 236.4624 101.3765
19991130 502.6549 274.5045 107.3932
19991231 1012.3894 356.3883 119.3770
--------
(1) The Company's 1999 peer group consists of the following companies:
Cambridge Technology Partners, Inc., Diamond Technology Partners
Incorporated, marchFIRST, Inc., iXL Enterprises, Inc., Proxicom, Inc.,
Sapient Corporation, Scient Corporation, Tanning Technology Corporation,
and Viant Corporation.
Employment Agreements
Braun Consulting has entered into employment agreements with Messrs.
Duvall, Evanisko, Kalustian and Bascobert. Mr. Duvall's agreement has a five-
year term, expiring on October 31, 2003. Each of the agreements for Messrs.
Evanisko, Kalustian and Bascobert has a three-year term, expiring on April 30,
2002.
Pursuant to their employment agreements, Mr. Duvall serves as Chief
Operating Officer and Executive Vice President, Messrs. Evanisko and Kalustian
serve as Executive Vice Presidents and Mr. Bascobert serves as Senior Vice
President. In addition, the agreements for Messrs. Duvall, Evanisko and
Kalustian provide for their nomination as directors.
As of December 31, 1999, pursuant to their employment agreements, the base
salary for Mr. Duvall was $315,000, for Mr. Evanisko was $300,000, for Mr.
Kalustian was $250,000 and for Mr. Bascobert was $225,000. Each of their base
salaries increase annually by the greater of five percent or the consumer
price index. Each of them is eligible to receive an annual bonus targeted to
be 20% of their respective base salaries. In addition, Mr. Duvall is entitled
to receive a quarterly bonus of $15,000, increasing each year by the greater
of five percent or the consumer price index.
Pursuant to their respective employment agreements and subject to vesting
schedules, each of Messrs. Evanisko, Kalustian and Bascobert was granted an
option to purchase shares of Common Stock under the 1998 Employee Long Term
Stock Investment Plan, and Mr. Duvall was granted an option to purchase shares
of Common Stock under the 1998 Executive Long Term Stock Investment Plan.
11
<PAGE>
Braun Consulting can terminate any of the employment agreements (1) for
cause, (2) on the executive's death or (3) on the executive's permanent
disability. All of the agreements define cause as the executive's material
gross negligence or willful misconduct, final conviction of a felony,
involvement in a conflict of interest or material breach of the material
provisions of the agreements. In addition, the agreements with Messrs.
Evanisko, Kalustian and Bascobert define cause to include the executive's
knowing violations of Braun Consulting's policies or standards of conduct.
Braun Consulting also can terminate the agreements with Messrs. Evanisko,
Kalustian and Bascobert without cause on 60 days prior written notice. Each of
Messrs. Evanisko, Kalustian and Bascobert can terminate his agreement for good
reason or on 60 days prior written notice. Their agreements define good reason
as a material breach of the agreements by Braun Consulting or a material
change in the location of employment, the executive's reporting relationship
or the nature or scope of the executive's duties. Either Braun Consulting or
Mr. Duvall can terminate his agreement for any reason on 90 days prior written
notice.
Under the agreements with Messrs. Evanisko, Kalustian and Bascobert, in the
case of an involuntary termination, the executive continues to receive his
base salary for one to two years depending on the remaining term under his
agreement and how long he has worked for Braun Consulting. However, if the
involuntary termination occurs after a change of control of Braun Consulting,
the executive will receive his base salary for the remainder of the term.
Under the agreements for Messrs. Evanisko, Kalustian and Bascobert, in the
event of a termination of employment by Braun Consulting or by the executive
for good reason, 75% of the unvested portion of the executive's options vest
immediately, and any remaining unexercised options terminate on the date of
termination of employment. In the event of a termination of employment on any
other terms, the unexercised portion of the options terminates on the date of
the termination of employment.
Under Mr. Duvall's agreement, if he is terminated for cause, the unvested
portion of his options terminates on the date of the termination of his
employment. If he is terminated other than for cause, or in the event of a
change of control, a portion of his unvested options vests immediately. Within
90 days of a change of control or his termination for cause, Mr. Duvall may
elect to sell to Braun Consulting a portion or all of the shares of Common
Stock acquired upon exercise of his options, at a price equal to $6.00 per
share, payable in annual installments not to exceed $480,000 per installment.
In the event of an involuntary termination, Mr. Duvall may elect to have a
portion or all of his vested but unexercised options terminated and receive
"special severance compensation" equal to the number of shares subject to the
terminated options, multiplied by $3.00. This amount is payable to Mr. Duvall
in annual installments not to exceed $240,000 per installment.
All of the agreements define involuntary termination as the termination of
employment by Braun Consulting, prior to the expiration of the term and on the
required prior written notice, for any reason other than for cause, the
executive's death or permanent disability. The agreements also state that a
change of control occurs when (1) Braun Consulting merges with another entity
and is not the surviving entity, sells all or substantially all of its assets
or is dissolved, (2) a person other than Steven J. Braun or his family becomes
the beneficial owner of at least 51% of the voting stock of Braun Consulting
or (3) the members of the Board of Directors of Braun Consulting on the date
that Braun Consulting becomes a public company, or those new directors
approved by the vote of at least 80% of such incumbent directors, cease to
constitute at least a majority of the Board.
The agreements for Messrs. Evanisko, Kalustian and Bascobert contain
standard provisions regarding confidentiality, non-solicitation, non-
competition and Braun Consulting's ownership of works of authorship prepared
in the scope of the executive's employment with Braun Consulting. Braun
Consulting and Mr. Duvall have entered into a separate agreement containing
similar confidentiality, non-solicitation, non-competition and ownership
provisions.
12
<PAGE>
PROPOSAL NO. 2--APPROVAL OF THE BRAUN CONSULTING, INC. 2001 EMPLOYEE STOCK
PURCHASE PLAN
The Board of Directors believes that the Braun Consulting, Inc. 2001
Employee Stock Purchase Plan (the "Plan") is an important way to promote the
interests of Braun Consulting by providing employees with the opportunity to
acquire a proprietary interest in the Company. Therefore, the Board of
Directors has approved the Plan and directed that the Plan be submitted to the
stockholders for approval. The description of the Plan contained herein is
qualified in its entirety by reference to the copy of the Plan attached as
Exhibit A to this Proxy Statement.
General. The Plan is intended to promote the interests of the Company and
its designated subsidiaries by providing employees with the opportunity to
acquire a proprietary interest in the Company through participation in a
payroll-deduction based employee stock purchase plan designed to qualify under
Section 423 of the Internal Revenue Code of 1986, as amended (the "Code").
Pursuant to the Plan, participating employees may purchase up to an aggregate
of 800,000 shares of the Company's Common Stock. The Plan becomes effective
upon stockholder approval and, unless terminated earlier by the Board of
Directors, will terminate upon the earlier of (i) two years after the
effective date or (ii) the date on which all shares available for issuance
under the Plan have been sold pursuant to purchase options exercised under the
Plan.
Shares of Common Stock will be offered for purchase under the Plan through
a series of successive offering periods until such time as (i) the maximum
number of shares of Common Stock available for issuance under the Plan have
been purchased or (ii) the Plan has been sooner terminated. Each offering
period will have a duration of six (6) months. Offering periods will run from
approximately February 1 to approximately July 31 of each year and from
approximately August 1 to approximately January 31 of each year. The first
offering period will begin on February 1, 2001 and terminate on July 31, 2001.
The Board of Directors has the power to change the duration and/or frequency
of the periods with respect to future offerings without stockholder approval
if the change is announced at least five (5) days before the scheduled
beginning of the first offering period to be affected. The Plan is not subject
to the Employee Retirement Income Security Act of 1974. The Plan is not
qualified under Section 401(a) of the Code.
Administration. The Board of Directors or a committee appointed by the
Board to administer the Plan (the "Plan Administrator") has full authority to
interpret and construe any provision of the Plan, to adopt, amend and rescind
any rules deemed desirable and appropriate for administering the Plan and not
inconsistent with the Plan, and to make all other determinations necessary or
advisable for the administration of the Plan.
Eligibility. Any person, including an officer, who is an employee of the
Company on the first business day (the "Offering Date") of a given offering
period is eligible to participate in that offering period under the Plan as
long as that person has submitted the required enrollment forms, subject to
the limitations imposed by the Plan and Section 423(b) of the Code. Any person
who becomes an employee after an Offering Date is not eligible to participate
in that offering period; however, that employee is eligible to participate in
the next offering period.
Additional Limitations. No employee will be granted an option under the
Plan if (1) immediately after the grant, that employee (or any other person
whose stock would be attributed to that employee pursuant to Section 424(d) of
the Code) would own capital stock of the Company and/or hold outstanding
options to purchase stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or of
any subsidiary of the Company, or (2) that option would permit that employee's
rights to purchase stock under all employee plans (as described in Section 423
of the Code) of the Company and its subsidiaries to accrue at a rate that
exceeds twenty-five thousand dollars ($25,000) of the fair market value of the
stock (determined at the time the option is granted) for each calendar year in
which that option is outstanding at any time.
13
<PAGE>
The fair market value of the Company's Common Stock on a given date will be
determined based on the closing sales price of the Common Stock for that date
(or if the Common Stock is not traded on that date, on the immediately
preceding trading date), as reported by the Nasdaq National Market, as
reported in The Wall Street Journal. If the price is not reported by Nasdaq or
the Common Stock is listed on a stock exchange, the fair market value per
share will be the closing sales price on that exchange on that date (or, if
the Common Stock is not traded on that date, on the immediately preceding
trading date), as reported in The Wall Street Journal.
Participation. An eligible employee may become a participant in the Plan by
completing a subscription agreement and any other required documents provided
by the Company. The enrollment documents will set forth the percentage of the
participant's compensation to be paid as contributions pursuant to the Plan.
Payroll deductions begin on the first full payroll following the Offering
Date and end on the last payroll paid on or before the last day of the
offering period to which the enrollment documents are applicable (the
"Purchase Date"), unless sooner terminated by the participant as provided in
the Plan.
Contributions. The aggregate contribution by a participant during any
offering period may not exceed six thousand dollars ($6,000). No interest will
accrue on the contributions of a participant in the Plan.
Subject to this aggregate period contribution limit, a participant will
elect to have payroll deductions made on each payday during the offering
period in an amount not less than one percent (1%) and not more than twenty
percent (20%) (or such greater percentage as the Board may establish from time
to time before an Offering Date) of such participant's compensation on each
payday during the offering period. All payroll deductions made by a
participant are credited to his or her account under the Plan. A participant
may not make any additional payments into the account.
A participant may discontinue his or her participation in the Plan as
provided in the Plan. On one occasion only during an offering period a
participant may increase or decrease the rate of his or her contributions with
respect to the offering period.
Option Grants. On the Offering Date of each offering period, each eligible
employee participating in that offering period will be granted an option to
purchase on each Purchase Date a number of shares of the Company's Common
Stock determined by dividing that employee's contributions accumulated before
the Purchase Date and retained in the participant's account as of the Purchase
Date by the applicable purchase price. However, the maximum number of shares
an employee may purchase during each offering period is one thousand (1,000)
shares (subject to any adjustment pursuant to the Plan), and is subject to the
limitations set forth in the Plan.
The purchase price with respect to an offering period is an amount equal to
85% of the fair market value of a share of Common Stock on the Offering Date
or the Purchase Date, whichever is lower. However, if (1) the Company's
stockholders approve an increase in the number of shares available under the
Plan, (2) all or a portion of those additional shares are to be issued with
respect to the current offering period at the time of the increase and (3) the
fair market value of a share on the date of increase is higher than the fair
market value on the Offering Date, then the purchase price with respect to the
additional shares authorized by the increase will be 85% of the fair market
value on the date of the increase or the fair market value on the Purchase
Date, whichever is lower.
Exercise of Option. Unless a participant withdraws from the Plan, his or
her option to purchase shares under the Plan will be exercised automatically
on each Purchase Date of an offering period, and the maximum number of shares
subject to the option will be purchased at the applicable purchase price with
the accumulated contributions in his or her account. Fractional shares will be
issued, as necessary. The shares purchased upon exercise of an option under
the Plan will be deemed to be transferred to the participant on the Purchase
Date. During his or her lifetime, a participant's option to purchase shares is
exercisable only by him or her.
14
<PAGE>
Delivery. As promptly as practicable after a Purchase Date, the number of
Shares purchased by each participant upon exercise of his or her option will
be deposited into an account established in the participant's name with the
broker designated by the Company. Any payroll deductions accumulated in a
participant's account that are not applied toward the purchase of shares on a
Purchase Date due to limitations imposed by the Plan will be returned to the
participant.
Voluntary Withdrawal; Termination of Employment. A participant may withdraw
all but not less than all the contributions credited to his or her account
under the Plan at any time before a Purchase Date. All of the participant's
contributions credited to his or her account will be paid to him or her
promptly after receipt of notice of withdrawal and his or her option for the
current period will be automatically terminated, and no further contributions
for the purchase of shares will be made during the offering period.
Upon termination of the participant's continuous status as an employee
before the Purchase Date of an offering period for any reason, whether
voluntary or involuntary, including retirement or death, the contributions
credited to his or her account will be returned to him or her or, in the case
of his or her death, to the person or persons designated as beneficiaries
under the Plan, and his or her option will be automatically terminated.
Stock. Subject to adjustment as provided in the Plan, the maximum number of
shares available for sale under the Plan will be eight hundred thousand
(800,000) shares. If the Board determines that, on a given Purchase Date, the
number of shares with respect to which options are to be exercised may exceed
(1) the number of shares of Common Stock that were available for sale under
the Plan on the Offering Date of the applicable offering period, or (2) the
number of shares available for sale under the Plan on such Purchase Date, the
Board may in its sole discretion provide (x) that the Company will make a pro
rata allocation of the shares of Common Stock available for purchase on such
Offering Date or Purchase Date, as applicable, in as uniform a manner as will
be practicable and as it will determine in its sole discretion to be equitable
among all participants exercising options to purchase Common Stock on such
Purchase Date, and continue the Plan as then in effect, or (y) that the
Company will make a pro rata allocation of the Shares available for purchase
on such Offering Date or Purchase Date, as applicable, in as uniform a manner
as will be practicable and as it will determine in its sole discretion to be
equitable among all participants exercising options to purchase Common Stock
on such Purchase Date, and terminate the Plan.
Transferability. Neither contributions credited to a participant's account
nor any rights with regard to the exercise of an option or to receive shares
under the Plan may be assigned, transferred, pledged or otherwise disposed of
in any way by the participant, other than by will, the laws or descent and
distribution, or to a designated beneficiary. Any attempt at assignment,
transfer, pledge or other disposition will be without effect, except that the
Company may treat such act as an election to withdraw funds in accordance with
the Plan.
Adjustments Upon Changes in Capitalization. Subject to any required
stockholder action, in the event of a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock (including any
change in the number of shares effected in connection with a change in
domicile of the Company), or any other increase or decrease in the number of
shares effected without receipt of consideration by the Company, the Company
will proportionately adjust (1) the number of shares covered by each option
under the Plan that has not yet been exercised, (2) the number of shares that
have been authorized under the Plan but have not yet been placed under option,
(3) the maximum number of shares under the Plan and (4) the price per share
covered by each option under the Plan that has not yet been exercised. These
adjustments will be made by the Board, whose determination will be final,
binding and conclusive.
Corporate Transactions. In the event of a dissolution or liquidation of the
Company, any offering period then in progress will terminate immediately
before the completion of that action, unless otherwise provided by the Board.
In the event of a sale of all or substantially all of the Company's assets or
a merger, consolidation or other capital reorganization of the Company with or
into another corporation, each option outstanding under the Plan will be
assumed or an equivalent option will be substituted by the successor
corporation or a parent or
15
<PAGE>
subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for outstanding options, each
offering period then in progress will be shortened and a new Purchase Date
will be set (the "New Purchase Date"), as of which date any offering period
then in progress will terminate. The New Purchase Date will be on or before
the date of completion of the transaction and the Board will notify each
participant in writing, at least ten (10) days before the New Purchase Date,
that the Purchase Date for his or her option has been changed to the New
Purchase Date and that his or her option will be exercised automatically on
the New Purchase Date, unless prior to such date he or she has withdrawn from
the offering period as provided in the Plan.
The Board may, if it so determines in the exercise of its sole discretion,
also make provision for adjusting the number of shares that have been
authorized under the Plan but have not yet been placed under option, as well
as the price per share of Common Stock covered by each outstanding option, in
the event that the Company effects one or more reorganizations,
recapitalizations, rights offerings or other increases or reductions of shares
of its outstanding Common Stock, and in the event the Company's being
consolidated with or merged into any other corporation.
Amendment or Termination. The Board may at any time and for any reason
terminate or amend the Plan. Except as provided in "Adjustments upon Changes
in Capitalization" and "Corporate Transactions" above, no such termination of
the Plan may affect the options previously granted. However, the Plan or an
offering period may be terminated by the Board on a Purchase Date or by the
Board's setting a New Purchase Date with respect to an offering period then in
progress if the Board determines that the termination of the Plan and/or the
offering period is in the best interests of the Company and the stockholders
or if continuation of the Plan and/or the offering period would cause the
Company to incur adverse accounting charges as a result of a change after the
effective date of the Plan in the generally accepted accounting rules
applicable to the Plan. Except as provided in "Adjustments upon Change in
Capitalization" and "Corporate Transactions" above and in this paragraph, no
amendment to the Plan will make any change in any option previously granted
that adversely affects the rights of any participant. In addition, to the
extent necessary to comply with Rule 16b-3 under the Securities Exchange Act
of 1934, or under Section 423 of the Code (or any successor rule or provision
or any applicable law or regulation), the Company will obtain stockholder
approval in such manner and to such a degree.
Without stockholder consent and without regard to whether any participant
rights may be considered to have been adversely affected, the Board (or its
committee) will be entitled to (1) change the offering period, (2) change the
aggregate period contribution limit described in "Contributions" above, (3)
limit the frequency and/or number of changes in the amount withheld during an
offering period, (4) establish the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars, (5) permit payroll withholding
in excess of the amount designated by a participant in order to adjust for
delays or mistakes in the Company's processing of properly completed
withholding elections, (6) establish reasonable waiting and adjustment periods
and/or accounting and crediting procedures to ensure that amounts applied
toward the purchase of Common Stock for each participant properly correspond
with amounts withheld from the participant's compensation, and (7) establish
other limitations or procedures as the Board (or its committee) determines in
its sole discretion advisable that are consistent with the Plan.
Restrictions of Rule 16b-3. The terms and conditions of options granted
under the Plan to, and the purchase of shares by, persons subject to Section
16 of the Securities Exchange Act of 1934 will comply with the applicable
provisions of Rule 16b-3. This Plan will be deemed to contain, and the options
will contain, and the shares issued upon exercise thereof will be subject to,
additional conditions and restrictions as may by required by Rule 16b-3 to
qualify for the maximum exemption from Section 16 of the Securities Exchange
Act of 1934 with respect to the Plan transactions.
Tax Treatment. Consistent with Section 423 of the Code, contributions to
the Plan will be included in the participant's taxable income and will not be
tax deductible. A participant's purchase of shares of Common
16
<PAGE>
Stock under the Plan will not result in the recognition of income for tax
purposes, nor will it result in an income tax deduction for the Company. When
a participant sells shares of Common Stock acquired under the Plan at least
two years after the date on which such shares were acquired, the participant
will recognize ordinary income equal to the lesser of (1) fifteen percent of
the fair market value of the shares on the first date of the respective
purchase period, or (2) the amount by which the fair market value of the
shares at the time of sale exceeded the price paid by the participant. If the
amount received upon such a disposition exceeds the fair market value of the
shares on the first date of the respective purchase period, then the excess
will be characterized as a long-term capital gain. If the participant has
incurred a loss in connection with such a disposition, then the participant
will realize no ordinary income, and the loss will be characterized as a long-
term capital loss. If a participant sells shares before the expiration of the
two-year holding period, the participant will recognize ordinary income equal
to the difference between the fair market value of the shares on the date such
shares were acquired and the price paid by the Participant. The participant
will have a capital gain or loss to the extent of the difference, if any,
between the amount received upon sale and fair market value of the shares on
the date such shares were acquired. Such capital gain or loss will be
characterized as long-term or short-term depending on whether or not the
shares were held for more than one year from the applicable date such shares
were acquired. The Company is not entitled to a deduction for amounts taxed as
ordinary income in cases where the participant realizes ordinary income by
reason of a sale of the shares before the expiration of the two-year holding
period described above.
Stockholder Rights. A participant will have no stockholder rights with
respect to the shares subject to his or her outstanding option until the
shares are purchased on the participant's behalf in accordance with the
provisions of the Plan and the participant has become a holder of record of
the purchased shares.
Stockholder Approval Requirement. The approval of the Plan requires the
affirmative vote of a majority of the shares present in person or by proxy at
the meeting and entitled to vote on the matter. Uninstructed shares of Common
Stock may not be voted on Proposal No. 2. Therefore, broker non-votes do not
affect the outcome. Abstentions have the effect of negative votes.
The Company recommends voting "For" Proposal No. 2.
PROPOSAL NO. 3--APPROVAL OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon recommendation of its Audit Committee, has
approved and recommends the appointment of Deloitte & Touche LLP as
independent public accountants to conduct an audit of the Company's financial
statements for the year 2000. This firm has acted as independent public
accountants for the Company since May 1998.
Members of Deloitte & Touche LLP will attend the Annual Meeting and will be
available to respond to questions which may be asked by stockholders. Such
members will also have an opportunity to make a statement at the Annual
Meeting if they desire to do so.
The Board of Directors recommends that stockholders approve the appointment
of Deloitte & Touche LLP as the Company's independent public accountants. The
approval of the appointment of independent public accountants requires the
affirmative vote of a majority of the outstanding shares present in person or
by proxy and entitled to vote on the matter. Uninstructed shares of Common
Stock may be voted on Proposal No. 3. For purposes of Proposal No. 3,
abstentions and broker non-votes have the effect of negative votes.
The Company recommends voting "For" Proposal No. 3.
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PROPOSALS, NOMINATIONS AND OTHER BUSINESS FOR NEXT ANNUAL MEETING
The Board of Directors knows of no other matters than those described above
which are likely to come before the Annual Meeting. If any other matters
properly come before the Annual Meeting, persons named in the accompanying
form of proxy intend to vote such proxy in accordance with their best judgment
on such matters.
The Company anticipates holding its 2001 annual meeting of shareholders on
or about June 1, 2001. Accordingly, any proposals of holders of Common Stock
of the Company intended to be presented at the annual meeting of stockholders
of the Company to be held in 2001 must be received by the Company, addressed
to the Secretary of the Company, 30 West Monroe, Suite 300, Chicago, Illinois
60603, no later than January 2, 2001, to be included in the proxy statement
relating to that meeting.
Any holder of Common Stock of the Company desiring to bring business before
the 2001 annual meeting of stockholders in a form other than a stockholder
proposal in accordance with the preceding paragraph must give written notice
that is received by the Company, addressed to the Secretary of the Company, 30
West Monroe, Suite 300, Chicago, Illinois 60603, within the period set forth
in the provisions of the Company's Bylaws summarized below. The written notice
must comply with the provisions of the Company's Bylaws summarized below.
The Company's Bylaws provide that, for business to be properly brought
before a stockholder meeting by a stockholder, the stockholder must have given
timely notice thereof in writing to the Secretary of the Company. To be
timely, a stockholder's notice must be delivered to, or mailed and received
at, the principal executive offices of the Company not more than 90 days and
not less than 60 days before the first anniversary of the previous year's
annual meeting; provided, however, that if no annual meeting of stockholders
was held in the previous year or if the date of the annual meeting is advanced
by more than 30 days before, or delayed by more than 60 days after, such
anniversary date, or if the election of directors is to occur at a special
meeting of stockholders, notice by the stockholder to be timely must be so
delivered, or mailed and received, no later than the close of business on the
tenth (10th) day following the day on which the date of such meeting has been
first publicly disclosed. A stockholder's notice to the Secretary must set
forth as to each matter the stockholder proposes to bring before the meeting
(a) a brief description of the business desired to be brought before the
meeting and the reasons for conducting such business at the meeting, (b) the
name and address, as they appear on the Company's books, of the stockholder
proposing such business, (c) the class and number of shares of the Company
which are beneficially owned by the stockholder, and (d) any material interest
of the stockholder in such business.
By Order of the Board of Directors
Gregory A. Ostendorf, Secretary
November 15, 2000
THE COMPANY WILL FURNISH WITHOUT CHARGE ADDITIONAL COPIES OF ITS ANNUAL
REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 TO INTERESTED
SECURITY HOLDERS ON REQUEST. THE COMPANY WILL FURNISH TO ANY SUCH PERSON ANY
EXHIBITS DESCRIBED IN THE LIST ACCOMPANYING SUCH REPORT UPON PAYMENT OF
REASONABLE FEES RELATING TO THE COMPANY'S FURNISHING SUCH EXHIBITS. REQUESTS
FOR COPIES SHOULD BE DIRECTED TO THE SECRETARY AT THE COMPANY'S ADDRESS
PREVIOUSLY SET FORTH.
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EXHIBIT A
BRAUN CONSULTING, INC.
2001 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The purpose of the Plan is to provide employees of the Company
and its Designated Subsidiaries with an opportunity to purchase Common Stock
of the Company. It is the intention of the Company to have the Plan qualify as
an "Employee Stock Purchase Plan" under Section 423 of the Code. The
provisions of the Plan shall, accordingly, be construed so as to extend and
limit participation in a manner consistent with the requirements of that
section of the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" shall mean the common stock of the Company.
(d) "Company" shall mean Braun Consulting, Inc., a Delaware corporation,
and any corporate successor to all or substantially all of the assets or
voting stock of Braun Consulting, Inc. which shall by appropriate action
adopt the Plan.
(e) "Compensation" shall mean the (i) regular base salary paid to an
Employee by the Company or a Designated Subsidiary during such individual's
period of participation in one or more offering periods under the Plan plus
(ii) all overtime payments, bonuses, profit-sharing distributions and other
incentive-type payments received during such period. Such Compensation
shall be calculated before deduction of (A) any income or employment tax
withholdings or (B) any and all contributions made by the Employee to any
Code Section 401(k) salary deferral plan or Code Section 125 cafeteria
benefit program now or hereafter established by the Company or any
Designated Subsidiary. However, Compensation shall NOT include any
contributions made on the Employee's behalf by the Company or any
Designated Subsidiary to any employee benefit or welfare plan now or
hereafter established (other than Code Section 401(k) or Code Section 125
contributions).
(f) "Continuous Status as an Employee" shall mean the absence of any
interruption or termination of service as an Employee. Continuous Status as
an Employee shall not be considered interrupted in the case of (i) family
medical leave; (ii) military leave; (iii) any other leave of absence
approved by the Administrator, provided that such leave is for a period of
not more than ninety (90) days, unless reemployment upon the expiration of
such leave is guaranteed by contract or statute, or unless provided
otherwise pursuant to Company policy adopted from time to time; or (iv) in
the case of transfers between location of the Company or between the
Company and its Designated Subsidiaries.
(g) "Contributions" shall mean all amount credited to the account of a
participant pursuant to the Plan.
(h) "Corporate Transaction" shall mean a sale of all or substantially
all of the Company's assets, or a merger, consolidation or other capital
reorganization of the Company with or into another corporation.
(i) "Designated Subsidiaries" shall mean the Subsidiaries that have been
designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan; provided however that the Board shall
only have the discretion to designate Subsidiaries if the issuance of
options to such Subsidiary's Employees pursuant to the Plan would not cause
the Company to incur adverse accounting charges.
(j) "Employee" shall mean any person, including an Officer, who is an
employee of the Company for tax purposes and who is customarily employed
for at least twenty (20) hours per week and more than five (5) months in a
calendar year by the Company or one of its Designated Subsidiaries.
(k) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(l) "Offering Date" shall mean the first business day of each Offering
Period of the Plan.
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(m) "Offering Period" shall mean a period of six (6) months commencing
on February 1 and August 1 of each year.
(n) "Officer" shall mean a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(o) "Plan" shall mean this 2001 Employee Stock Purchase Plan.
(p) "Purchase Date" shall mean the last day of each Offering Period of
the Plan.
(q) "Purchase Price" shall mean with respect to an Offering Period an
amount equal to 85% of the Fair Market Value (as defined in Section 7(b)
below) of a Share of Common Stock on the Offering Date or on the Purchase
Date, whichever is lower; provided, however, that in the event (i) of any
stockholder-approved increase in the number of Shares available for
issuance under the Plan, and (ii) all or a portion of such additional
Shares are to be issued with respect to the Offering Period that is
underway at the time of such increase ("Additional Shares"), and (iii) the
Fair Market Value of a Share of Common Stock on the date of such increase
(the "Approval Date Fair Market Value") is higher than the Fair Market
Value on the Offering Date for any such Offering Period, then in such
instance the Purchase Price with respect to Additional Shares shall be 85%
of the Approval Date Fair Market Value or the Fair Market Value of a Share
of Common Stock on the Purchase Date, whichever is lower.
(r) "Share" shall mean a share of Common Stock, as adjusted in
accordance with Section 18 of the Plan.
(s) "Subsidiary" shall mean a corporation, domestic or foreign, of which
not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter
organized or acquired by the Company or a Subsidiary.
3. Eligibility.
(a) Any person who is an Employee as of the Offering Date of a given
Offering Period shall be eligible to participate in such Offering Period
under the Plan, subject to the requirements of Section 5(a) and the
limitation imposed by Section 423(b) of the Code. Any person who becomes an
Employee after an Offering Date shall not be eligible to participate in
such Offering Period; however, such Employee shall be eligible to
participate in the next Offering Period.
(b) Any provision of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) if, immediately
after the grant, such Employee (or any other person whose stock would be
attributed to such Employee pursuant to Section 424(d) of the Code) would
own capital stock of the Company and/or hold outstanding options to
purchase stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of stock of the Company or of any
subsidiary of the Company, or (ii) if such option would permit his or her
rights to purchase stock under all employee plans (described in Section 423
of the Code) of the Company and its Subsidiaries to accrue at a rate that
exceeds twenty-five thousand dollars ($25,000.00) of the Fair Market Value
(as defined in Section 7(b) below) of such stock (determined at the time
such option is granted) for each calendar year in which such option is
outstanding at any time.
4. Offering Periods. The Plan shall be implemented by a series of Offering
Periods of six (6) months' duration, with new Offering Periods commencing on
or about February 1 and August 1 of each year (or at such other time or times
as may be determined by the Board of Directors). The first Offering Period
shall commence on February 1, 2001 and continue until July 31, 2001. The Plan
shall continue until terminated in accordance with Section 19 hereof. The
Board of Directors of the Company shall have the power to change the duration
and/or frequency of Offering Periods with respect to future offerings without
stockholder approval if such change is announced at least five (5) days prior
to the scheduled beginning of the first Offering Period to be affected.
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5. Participation.
(a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement and any other required documents
("Enrollment Documents") provided by the Company and submitting them to the
Company's Human Resources Department or the stock brokerage or other
financial services firm designated by the Company ("Designated Broker")
prior to the applicable Offering Date, unless a later time for submission
of the Enrollment Documents is set by the Board for all eligible Employees
with respect to a given Offering Period. The Enrollment Documents and
submission may be electronic, as directed by the Company. The Enrollment
documents shall set forth the percentage of participant's Compensation
(subject to Section 6(a) below) to be paid as Contributions pursuant to the
Plan.
(b) Payroll deductions shall commence on the first full payroll
following the Offering Date and shall end on the last payroll paid on or
prior to the Purchase Date of the Offering Period to which the Enrollment
Documents are applicable, unless sooner terminated by the participant as
provided in Section 10 herein.
6. Method of Payment of Contributions.
(a) The aggregate Contribution by a participant during any Offering
Period may not exceed six thousand dollars ($6,000.00) (the "Aggregate
Period Contribution Limit").
(b) Subject to the Aggregate Period Contribution Limit, a participant
shall elect to have payroll deductions made on each payday during the
Offering Period in an amount not less than one percent (1%) and not more
than twenty percent (20%) (or such greater percentage as the Board may
establish from time to time before an Offering Date) of such participant's
Compensation on each payday during the Offering Period. All payroll
deductions made by a participant shall be credited to his or her account
under the Plan. A participant may not make any additional payments into
such account.
(c) A participant may discontinue his or her participation in the Plan
as provided in Section 10, or, on one occasion only during an Offering
Period may increase or decrease the rate of his or her Contributions with
respect to the Offering Period by completing and filing with the Company
new Enrollment Documents authorizing a change in the payroll deduction
rate. The change in rate shall be effective as of the beginning of the next
payroll period following the date of filing of the new Enrollment
Documents, if the documents are completed at least five (5) business days
prior to such date and, if not, as of the beginning of the next succeeding
payroll period.
(d) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) herein, a participant's
payroll deductions may be decreased during any Offering Period scheduled to
end during the current calendar year to 0%. Payroll deductions shall re-
commence at the rate provided in such participants Enrollment Documents at
the beginning of the first Offering Period that is scheduled to end in the
following calendar year, unless terminated by the participant as provided
in Section 10.
7. Grant of Option.
(a) On the Offering Date of each Offering Period, each eligible Employee
participating in such Offering Period shall be granted an option to
purchase on each Purchase Date a number of shares of the Company's Common
Stock determined by dividing such Employee's Contributions accumulated
prior to such Purchase Date and retained in the participant's account as of
the Purchase Date by the applicable Purchase Price; provided however that
the maximum number of Shares an Employee may purchase during each Offering
Period shall be one thousand (1,000) Shares (subject to any adjustment
pursuant to Section 18 below), and provided further that such purchase
shall be subject to the limitations set forth in Sections 3(b), 6(a) and
12.
(b) The fair market value of the Company's Common Stock on a given date
(the "Fair Market Value") shall be determined based on the closing sales
price of the Common Stock for such date (or, in the event the Common Stock
is not traded on such date, on the immediately preceding trading date), as
reported
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by the Nasdaq National Market or, if such price is not reported by Nasdaq
or, in the event the Common Stock is listed on a stock exchange, the Fair
Market Value per share shall be the closing sales price on the such
exchange on such date (or, in the vent that the Common Stock is not traded
on such date, on the immediately preceding trading date), as reported in
The Wall Street Journal.
8. Exercise of Option. Unless a participant withdraws from the Plan as
provided in Section 10, his or her option for the purchase of Shares will be
exercised automatically on each Purchase Date of an Offering Period, and the
maximum number of Shares subject to the Option will be purchased at the
applicable Purchase Price with the accumulated Contributions in his or her
account. Fractional Shares shall be issued, as necessary. The Shares purchased
upon exercise of an option hereunder shall be deemed to be transferred to the
participant on the Purchase Date. During his or her lifetime, a participant's
option to purchase Shares hereunder is exercisable only by him or her.
9. Delivery. As promptly as practicable after a Purchase Date, the number
of Shares purchased by each participant upon exercise of his or her option
shall be deposited into an account established in the participant's name with
the Designated Broker. Any payroll deductions accumulated in a participant's
account that are not applied toward the purchase of Shares on a Purchase Date
due to limitations imposed by the Plan shall be returned to the participant.
10. Voluntary Withdrawal; Termination of Employment.
(a) A participant may withdraw all but not less than all the
Contributions credited to his or her account under the Plan at any time
prior to a Purchase Date by submitting a completed "Notice of Withdrawal"
form to the Company's Human Resources Department or electronically
completing the required documentation provided by the Company through the
Designated Broker, as directed by the Company's Human Resources Department.
All of the participant's Contributions credited to his or her account will
be paid to him or her promptly after receipt of his or her notice of
withdrawal and his or her option for the current period will be
automatically terminated, and no further Contributions for the purchase of
Shares will be made during the Offering Period.
(b) Upon termination of the participant's Continuous Status as an
Employee prior to the Purchase Date of an Offering Period for any reason,
whether voluntary or involuntary, including retirement or death, the
Contributions credited to his or her account will be returned to him or her
or, in the case of his or her death, to the person or persons entitled
thereto under Section 14, and his or her option will be automatically
terminated.
(c) In the event an Employee fails to remain in Continuous Status as an
Employee of the Company for at least twenty (20) hours per week during the
Offering Period in which the Employee is a participant, he or she will be
deemed to have elected to withdraw from the Plan and the Contributions
credited to his or her account will be returned to him or her and his or
her option terminated.
(d) A participant's withdrawal from an offering will not have any effect
upon his or her eligibility to participate in a succeeding offering or in
any similar plan that may hereafter by adopted by the Company.
11. Interest. No interest shall accrue on the Contributions of a
participant in the Plan.
12. Stock.
(a) Subject to adjustment as provided in Section 18, the maximum number
of Shares that shall be made available for sale under the Plan shall eight
hundred thousand (800,000) Shares. If the Board determines that, on a given
Purchase Date, the number of shares with respect to which options are to be
exercised may exceed (1) the number of shares of Common Stock that were
available for sale under the Plan on the Offering Date of the applicable
Offering Period, or (2) the number of shares available for sale under the
Plan on such Purchase Date, the Board may in its sole discretion provide
(x) that the Company shall make a pro rata allocation of the Shares of
Common Stock available for purchase on such Offering Date or Purchase
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Date, as applicable, in as uniform a manner as shall be practicable and as
it shall determine in its sole discretion to be equitable among all
participants exercising options to purchase Common Stock on such Purchase
Date, and continue the Plan as then in effect, or (y) that the Company
shall make a pro rata allocation of the Shares available for purchase on
such Offering Date or Purchase Date, as applicable, in as uniform a manner
as shall be practicable and as it shall determine in its sole discretion to
be equitable among all participants exercising options to purchase Common
Stock on such Purchase Date, and terminate the Plan pursuant to Section 19
below. The Company may make a pro rata allocation of the Shares available
on the Offering Date of any applicable Offering Period pursuant to the
preceding sentence, notwithstanding any authorization of additional Shares
for issuance under the Plan by the Company's stockholders subsequent to the
Offering Date.
(b) The participant shall have no interest or voting right in Shares
covered by his or her option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant
and his or her spouse.
13. Administration. The Board, or a committee named by the Board, shall
supervise and administer the Plan and shall have full power to adopt, amend
and rescind any rules deemed desirable and appropriate for the administration
of the Plan and not inconsistent with the Plan, to construe and interpret the
Plan, and to make all other determinations necessary or advisable for the
administration of the Plan.
14. Designation of Beneficiary.
(a) A participant may designate a beneficiary who is to receive any
Shares and cash, if any, from the participant's account under the Plan in
the event of such participant's death subsequent to the end of an Offering
Period but prior to delivery to him or her of such Shares and cash. In
addition, a participant may designate a beneficiary who is to receive any
cash from the participant's account under the Plan in the event of such
participant's death prior to the Purchase Date of an Offering Period. If a
participant is married and the designated beneficiary is not the spouse,
spousal consent shall be required for such designation to be effective.
Beneficiary designations under this Section 14(a) shall be made as directed
by the Human Resources Department of the Company, which may require
electronic submission of the required documentation with the Designated
Broker.
(b) Such designation of beneficiary may be changed by the participant
(and his or her spouse, if any) at any time by submission of the required
notice, which required notice may be electronic. In the event of the death
of a participant and in the absence of a beneficiary validly designated
under the Plan who is living at the time of such participant's death, the
Company shall deliver such Shares and/or cash to the executor or
administrator of the estate of the participant, or if no such executor or
administrator has been appointed (to the knowledge of the Company), the
Company, in its discretion, may deliver such Shares and/or cash to the
spouse or to any one or more dependents or relatives of the participant, or
if no spouse, dependent or relative is known to the Company, then to such
person as the Company may designate.
15. Transferability. Neither Contributions credited to a participant's
account nor any rights with regard to the exercise of an option or to receive
Shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws or descent and
distribution, or as provided in Section 14) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds in accordance with Section 10.
16. Use of Funds. All Contributions received or held by the Company under
the Plan may be used by the Company for any corporate purpose, and the Company
shall not obligated to segregate such Contributions.
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17. Reports. Individual accounts will be maintained for each participant in
the Plan. Statements of account will be provided to participating Employees by
the Company or the Designated Broker at least annually, which statements will
set forth the amounts of Contributions, the per Shares Purchase Price, the
number of Shares purchased and the remaining cash balance, if any.
18. Adjustments Upon Changes in Capitalization; Corporate Transactions.
(a) Adjustment. Subject to any required action by the stockholders of
the Company, the number of Shares covered by each option under the Plan
that has not yet been exercised, the number of Shares that have been
authorized for issuance under the Plan but have not yet been placed under
option (collectively, the "Reserves"), the maximum number of Shares of
Common Stock set forth in Section 12(a)(i) above, and the price per Share
of Common Stock covered by each option under the Plan that has not yet been
exercised, shall be proportionately adjusted for any increase or decrease
in the number of issued Shares resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock
(including any such change in the number of Shares of Common Stock effected
in connection with a change in domicile of the Company), or any other
increase or decrease in the number of Shares effected without receipt of
consideration by the Company; provided however that conversion of any
convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made
by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issue by the
Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of Shares
subject to an option.
(b) Corporate Transactions. In the event of a dissolution or liquidation
of the Company, any Offering Period then in progress will terminate
immediately prior to the consummation of such action, unless otherwise
provided by the Board. In the event of a Corporate Transaction, each option
outstanding under the Plan shall be assumed or an equivalent option shall
be substituted by the successor corporation or a parent or Subsidiary of
such successor corporation. In the event that the successor corporation
refuses to assume or substitute for outstanding options, each Offering
Period then in progress shall be shortened and a new Purchase Date shall be
set (the "New Purchase Date"), as of which date any Offering Period then in
progress will terminate. The New Purchase Date shall be on or before the
date of consummation of the transaction and the Board shall notify each
participant in writing, at least ten (10) days prior to the New Purchase
Date, that the Purchase Date for his or her option has been changed to the
New Purchase Date and that his or her option will be exercised
automatically on the New Purchase Date, unless prior to such date he or she
has withdrawn from the Offering Period as provided in Section 10. For
purposes of this Section 18, an option granted under the Plan shall be
deemed to be assumed, without limitation, if, at the time of issuance of
the stock or other consideration upon a Corporate Transaction, each holder
of an option under the Plan would be entitled to receive upon exercise of
the option the same number and kind of shares of stock or the same amount
of property, cash or securities as such holder would have been entitled to
receive upon the occurrence of the transaction if the holder had been,
immediately prior to the transaction, the holder of the number of Shares of
Common Stock covered by the option at such time (after giving effect to any
adjustments in the number of Shares covered by the option as provided for
in this Section 18); provided however that if the consideration received in
the transaction is not solely common stock of the successor corporation or
its parent (as defined in Section 424(e) of the Code), the Board may, with
the consent of the successor corporation, provide for the consideration to
be received upon exercise of the option to be solely common stock of the
successor corporation or its parent equal in Fair Market Value to the per
Share consideration received by the holders of Common Stock in the
transaction.
The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the
price per Share of Common Stock covered by each outstanding option, in the
event that the Company effects one or more reorganizations,
recapitalizations, rights offerings or other increases or reductions of
Shares of its outstanding Common Stock, and in the event the Company's
being consolidated with or merged into any other corporation.
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19. Amendment or Termination.
(a) The Board may at any time and for any reason terminate or amend the
Plan. Except as provided in Section 18, no such termination of the Plan may
affect the options previously granted, provided that the Plan or an
Offering Period may be terminated by the Board on a Purchase Date or by the
Board's setting a New Purchase Date with respect to an Offering Period then
in progress if the Board determines that the termination of the Plan and/or
the Offering Period is in the best interests of the Company and the
stockholders or if continuation of the Plan and/or the Offering Period
would cause the Company to incur adverse accounting charges as a result of
a change after the effective date of the Plan in the generally accepted
accounting rules applicable to the Plan. Except as provided in Section 18
and in this Section 19, no amendment to the Plan shall make any change in
any option previously granted that adversely affects the rights of any
participant. In addition, to the extent necessary to comply with Rule 16b-3
under the Exchange Act, or under Section 423 of the Code (or any successor
rule or provision or any applicable law or regulation), the Company shall
obtain stockholder approval in such manner and to such a degree as so
required.
(b) Without stockholder consent and without regard to whether any
participant rights may be considered to have been adversely affected, the
Board (or its committee) shall be entitled to change the Offering Period,
change the Aggregate Period Contribution Limit, limit the frequency and/or
number of changes in the amount withheld during an Offering Period,
establish the exchange ratio applicable to amounts withheld in a currency
other than U.S. dollars, permit payroll withholding in excess of the amount
designated by a participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections,
establish reasonable waiting and adjustment periods and/or accounting and
crediting procedures to ensure that amounts applied toward the purchase of
Common Stock for each participant properly correspond with amounts withheld
from the participant's Compensation, and establish such other limitations
or procedures as the Board (or its committee) determines in its sole
discretion advisable that are consistent with the Plan.
20. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or
by the person, designated by the Company for the receipt thereof.
21. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such Shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, applicable state securities laws and the
requirements of any stock exchange upon which the Shares may then be listed,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.
As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without
any present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.
22. Term of Plan; Effective Date. The Plan shall become effective upon
approval by the Company's stockholders. It shall continue in effect for a term
of two (2) years unless sooner terminated under Section 19.
23. Additional Restrictions of Rule 16b-3. The terms and conditions of
options granted hereunder to, and the purchase of Shares by, persons subject
to Section 16 of the Exchange Act shall comply with the applicable provisions
of Rule 16b-3. This Plan shall be deemed to contain, and such options shall
contain, and the Shares issued upon exercise thereof shall be subject to, such
additional conditions and restrictions as may by required by Rule 16b-3 to
qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to the Plan transactions.
A-7
<PAGE>
BRAUN CONSULTING, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES SET FORTH BELOW AND
"FOR" EACH OF THE FOLLOWING PROPOSALS:
1. Election of Directors --
Nominees: Michael J. Evanisko, James M. Kalustian
and Eric V. Schultz
For Withhold For All
All All Except
[_] [_] [_]
INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the following space.
----------------------------------------------------------------------
2. Proposal to approve the Braun Consulting, Inc. 2001 Employee Stock
Purchase Plan.
For Against Abstain
[_] [_] [_]
3. Proposal to approve the appointment of Deloitte & Touche LLP as the Company's
independent public accountants for the fiscal year ending December 31, 2000.
For Against Abstain
[_] [_] [_]
This Proxy, when properly executed, will be voted as directed, but if no
instructions are specified, this Proxy will be voted for the director nominees
set forth above and for each of the proposals set forth above. If any other
business is presented at the Annual Meeting, this Proxy will be voted by those
named in this Proxy in their best judgment. At the present time, the Board of
Directors knows of no other business to be presented at the Annual Meeting. All
prior proxies are hereby revoked.
Dated: ___________________, 2000
Signature: _____________________________________________________________________
Signature if held jointly ______________________________________________________
Please sign exactly as your name appears above. If shares are held jointly, each
holder should sign. When signing as attorney, executor, administrator, trustee
or guardian, please give full title as such. If a corporation, please sign in
full corporate name by president or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
--------------------------------------------------------------------------------
. FOLD AND DETACH HERE .
YOUR VOTE IS IMPORTANT!
PLEASE VOTE, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
5504--Braun Consultng, Inc.
<PAGE>
COMMON COMMON
STOCK BRAUN CONSULTING, INC. STOCK
30 W. Monroe Street, Suite 300
Chicago, Illinois 60603-2402
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned stockholder of Braun Consulting, Inc. (the "Company") hereby
appoints Steven J. Braun, John C. Burke, and Gregory A. Ostendorf, or any of
them, with full power to act alone, the true and lawful attorneys-in-fact of
the undersigned, with full power of substitution and revocation, and hereby
authorizes him or them to represent and to vote, as designated below, in respect
of the undersigned's shares of Common Stock of the Company at the Annual Meeting
of Stockholders to be held at The Mid-Day Club, One Bank One Plaza, 10 S.
Dearborn Street, Floor 56, Chicago, Illinois 60603, at 8:30 a.m., Central time,
on Friday, December 15, 2000, and at any or all adjournments thereof, the number
of shares the undersigned would be entitled to vote if personally present.
PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY CARD PROMPTLY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
(Continued and to be signed on reverse side.)
--------------------------------------------------------------------------------
5504--Braun Consulting, Inc.
