<PAGE> 1
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
COMPUTER TASK GROUP, INCORPORATED
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
COMPUTER TASK GROUP, INCORPORATED
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:_________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):___________
(4) Proposed maximum aggregate value of transaction:_____________________
(5) Total fee paid:______________________________________________________
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:______________________________________________
(2) Form, Schedule or Registration Statement No.:________________________
(3) Filing Party:________________________________________________________
(4) Date Filed:__________________________________________________________
<PAGE> 2
[CTG LOGO]
COMPUTER TASK GROUP,
INCORPORATED
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 26, 1995
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of COMPUTER
TASK GROUP, INCORPORATED will be held at our Corporate Headquarters, 800
Delaware Avenue, Buffalo, New York on Wednesday, April 26, 1995, at 10:00 a.m.
for the following purposes:
1. To elect three Class I directors to hold office until the 1997
annual meeting of shareholders and until their successors are elected and
qualified.
2. To consider and act upon a proposal to amend the Company's 1991
Employee Stock Option Plan (i) to increase the number of shares of the
Company's Common Stock available for options under the plan by 500,000 to
1,000,000 shares; (ii) to provide for an initial one-time grant of a stock
option covering 5,000 shares of Common Stock to new outside directors;
(iii) to enable the Compensation Committee to set the option exercise price
for nonqualified stock options at other than the fair market value; and
(iv) to make such other amendments described herein.
3. To take action upon and transact any other business properly
brought before said meeting or any adjournment or adjournments thereof.
In accordance with the provisions of the By-laws, the record of
shareholders entitled to notice of and to vote at the meeting and any
adjournment thereof has been taken at the close of business on March 15, 1995.
Dated: Buffalo, New York
March 27, 1995
By Order of the Board of Directors,
Joseph G. Makowski
Joseph G. Makowski
Secretary
<PAGE> 3
COMPUTER TASK GROUP,
INCORPORATED
PROXY STATEMENT
This Proxy Statement and the accompanying form of proxy are being mailed on
or about March 27, 1995, in connection with the solicitation by the Board of
Directors (Board) of Computer Task Group, Incorporated (Company or CTG) of
proxies to be voted at the annual meeting of shareholders on April 26, 1995, and
all adjournments thereof. The mailing address of the Company's principal
executive office is 800 Delaware Avenue, Buffalo, New York 14209.
Each share is entitled to one vote. Shares cannot be voted at the meeting
unless the shareholder is present or represented by proxy. When proxies in the
accompanying form are returned properly executed, the shares represented thereby
will be voted at the meeting in accordance with the instructions contained in
the proxy, unless the proxy is revoked prior to its exercise. Proxies submitted
with abstentions and broker non-votes will be counted in determining whether or
not a quorum is present. Abstentions and broker non-votes will not be counted in
tabulating the votes cast on proposals submitted to shareholders.
The close of business on March 15, 1995 has been fixed by the Board as the
record date for the determination of shareholders entitled to vote at the
meeting. On that date, the Company had outstanding and entitled to vote
10,008,824 shares of Common Stock, par value $.01 per share (Common Stock).
Except as otherwise provided by law, the holders of shares of the Common Stock
vote as one class for the election of directors of the Company and on all other
matters submitted to a vote of the shareholders of the Company.
ELECTION OF DIRECTORS
At the annual meeting of shareholders, in accordance with the Company's
Certificate of Incorporation and By-laws, three (3) persons are to be elected to
the Board of Directors of the Company as Class I directors to hold office until
the 1997 annual meeting of shareholders and until their successors are elected
and qualified.
It is intended that shares represented by properly executed proxies will be
voted, in the absence of contrary instructions, in favor of the election of the
following nominees as Class I directors - Gale S. Fitzgerald, Paul W. Joy and
Randolph A. Marks. Messrs. Joy, Marks and Campbell are presently Class I
directors of the Company. David N. Campbell, who retired as Chairman and Chief
Executive Officer of the Company on September 26, 1994, is not standing for
re-election. Pursuant to the Company's By-laws, each of the classes of directors
are required to have at least three (3) directors or such lesser number as may
be permitted by law and be as nearly equal in number as possible. Accordingly,
Ms. Fitzgerald has been nominated to become a Class I director and will resign
as a Class II director immediately following her election as a Class I director.
Exclusive of Ms. Fitzgerald, the current Class II directors of the Company whose
terms of office extend until the 1996 annual meeting of shareholders and until
their successors are elected and qualified are G. David Baer, George B. Beitzel
and Richard L. Crandall.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
NOMINEES FOR CLASS I DIRECTORS
If any of those nominated should not continue to be available for election,
it is intended that the shares represented by the accompanying form of proxy
will be voted for such other person or persons as the Board shall designate. No
circumstances are presently known which would render any nominee named herein
unavailable for election.
1
<PAGE> 4
The following information about the Company's directors relating to their
principal occupations or employment, name and principal business of the
corporation or other organization in which such occupation or employment is
carried on, and other affiliations has been furnished to the Company by the
respective directors.
<TABLE>
<S> <C>
Gale S. Fitzgerald Chairman and Chief Executive Officer of the Company since October
(Class II) 1994. Ms. Fitzgerald joined the Company in May 1991 as Senior
Age 44 Vice President responsible for the Company's Northeastern United
Director since States and Canadian operations and was promoted to President and
July 1993 Chief Operating Officer on July 1, 1993. Prior to joining the
Company, Ms. Fitzgerald was Vice President, Professional Services
at International Business Machines Corporation, where she had
worked for 18 years in various management positions.
G. David Baer Co-founder of the Company, Executive Vice President since June
(Class II) 1988. From March 1986 until June 1988, Mr. Baer was an
Age 59 independent business consultant. Prior to his temporary
Director since 1966 retirement in March 1986, he was an Executive Vice President of
the Company since June 1979. Prior to that date, he was a Vice
President and Treasurer of the Company from the time of its
organization in 1966.
Paul W. Joy Mr. Joy is an independent business consultant. From 1985 to
(Class I) August 1990, he served as Vice Chairman of the Board of American
Age 71 Brass Company.
Director since 1982
Randolph A. Marks Co-founder of the Company, independent business consultant. From
(Class I) 1985 to September 1990, Mr. Marks served as Chairman of the Board
Age 59 of American Brass Company. Mr. Marks is a director of Pratt &
Director since 1966 Lambert, Inc., a manufacturer of paint products, and of Marine
Midland Bank, Western New York Region. Mr. Marks was engaged by
the Company as a consultant from March 1984 until his retirement
from the Company in December 1985. Prior to March 1984, Mr. Marks
served as Chairman of the Board and Chief Executive Officer of
the Company commencing in June 1979, and prior thereto as
Chairman of the Board and President of the Company from the time
of its organization in 1966.
Richard L. Crandall Chairman of the Board of Directors of Comshare, Inc., a computer
(Class II) software and services company. Mr. Crandall served as the
Age 51 President and Chief Executive Officer of Comshare from 1969 to
Director since 1994.
July 1993
George B. Beitzel Mr. Beitzel has been an independent business consultant since his
(Class II) retirement from International Business Machines Corporation in
Age 66 1987 where he served as Senior Vice President. Mr. Beitzel joined
Director since IBM in 1955 as a sales representative and was a member of IBM's
January 1994 board of directors from 1972 until 1985. He is a director of
Bankers Trust Company, FlightSafety International, Inc., a
provider of aviation training skills, Phillips Petroleum Company,
Phillips Gas Company, Roadway Services, Inc., a transportation
and freight company, Rohm and Haas Company, a manufacturer of
plastic materials, Xillix Technologies Corp., a manufacturer and
distributor of computer imaging systems, The Colonial
Williamsburg Foundation, a colonial restoration museum and hotel
complex, and TIG Holdings, Inc., a property and casualty
insurance holding company.
David N. Campbell Mr. Campbell is the former Chairman and Chief Executive Officer
(Class I) of the Company, a position he held from March 1984 through
Age 53 September 1994. Mr. Campbell is a director of National Fuel Gas
Director since 1970 Company, Gibraltar Steel Corporation, First Empire State
Corporation, a bank holding company, and Dunlop Tire Corporation.
He is also the regional vice chairman of The Business Council of
New York State, Inc. and a director of the New York State Science
and Technology Foundation, chairman of the Roswell Park Cancer
Institute Community Council, director of the Greater Buffalo
Partnership, member of the University Council of the State
University of New York at Buffalo, and a trustee of Niagara
University.
</TABLE>
2
<PAGE> 5
SECURITY OWNERSHIP OF THE COMPANY'S COMMON SHARES
BY CERTAIN BENEFICIAL OWNERS AND BY MANAGEMENT
Security Ownership of Certain Beneficial Owners.
<TABLE>
As of March 15, 1995, the following persons were known by the Company to be
the beneficial owners of more than five percent of Common Stock. The following
table shows the nature and amount of their beneficial ownership.
<CAPTION>
AMOUNT AND
NAME AND ADDRESS NATURE OF PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP(1) OF CLASS
- ------------------------- ---------------------------------- --------------- ----------
<S> <C> <C> <C>
Common Stock............. Thomas R. Beecher, Trustee 1,770,200 17.7%
CTG Stock Employee
Compensation Trust
200 Theater Place
Buffalo, NY 14202
Common Stock............. Brinson Holdings, Inc. 807,800(2) 8.1%
209 South LaSalle Street
Chicago, IL 60604
Common Stock............. Rockefeller & Co., Inc. 632,565(3) 6.3%
30 Rockefeller Plaza
New York, NY 10112
- ---------------
<FN>
(1) The beneficial ownership information presented is based upon information
furnished by each person or contained in filings made with the Securities
and Exchange Commission (SEC). Except as otherwise indicated, each holder
has sole voting and investment power with respect to the shares indicated.
(2) Amount indicated includes beneficial ownership of 343,586 shares owned by
Brinson Partners, Inc. (BPI) and 464,214 shares owned by Brinson Trust
Company (BTC). BTC is a wholly-owned subsidiary of BPI, and BPI is a
wholly-owned subsidiary of Brinson Holdings, Inc. BPI and BTC have sole
voting and investment power with respect to the shares indicated.
(3) Rockefeller & Co., Inc. (Rockefeller) is an investment manager representing
three limited partnerships each of which owns less than 5% of the Company's
Common Stock. Each limited partnership has executed an investment management
agreement granting Rockefeller the right to exercise full discretion with
respect to all matters relating to the stock of CTG held by them, including
sole voting and dispositive power.
</TABLE>
3
<PAGE> 6
Security Ownership by Management.
As of March 15, 1995, the directors and nominees for director individually,
the named executive officers, and all directors, nominees for director and
executive officers of the Company as a group, respectively, owned beneficially
the following amounts of the Company's Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME OF INDIVIDUAL BENEFICIAL PERCENT
OR NUMBER IN GROUP OWNERSHIP(1) OF CLASS
- ------------------ ---------------- ----------
<S> <C> <C>
Gale S. Fitzgerald............................................ 70,931(2) *
G. David Baer................................................. 59,239(3)(4) *
Randolph A. Marks............................................. 82,598(3)(5) *
Paul W. Joy................................................... 61,500(6) *
Richard L. Crandall........................................... 16,000 *
George B. Beitzel............................................. 33,400(7) *
David N. Campbell............................................. 304,283(3)(8) 3.0%
Stephen A. Hoffman............................................ 29,977(9) *
Mark V. Megregian............................................. 4,928(10) *
Stuart C. Woodward............................................ 13,310(11) *
All directors and executive officers as a group (19 828,920(12) 8.1%
persons)....................................................
- ---------------
<FN>
*Less than 1 percent of outstanding shares.
(1) The beneficial ownership information presented is based upon information
furnished by each person or contained in filings made with the SEC. Except
as otherwise indicated, each holder has sole voting and investment power
with respect to the shares indicated.
(2) Amount indicated includes options to purchase 28,500 shares which are or
will become exercisable within sixty (60) days and 1,250 shares owned by
members of Ms. Fitzgerald's immediate family.
(3) Under an agreement entered into in February 1981, upon the death of Messrs.
Campbell, Baer, or Marks, the Company will have the option to purchase up
to as many shares of Common Stock owned by the decedent as may be purchased
with the proceeds of the insurance on the life of the decedent maintained
by the Company (currently $1,748,912 in the aggregate). The purchase price
for such shares will be 90 percent of the market price of such shares on
the Friday immediately preceding the date of death.
(4) Amount indicated includes options to purchase 44,000 shares which are or
will become exercisable within sixty (60) days and 10,000 shares owned by
members of Mr. Baer's immediate family.
(5) Amount indicated represents 72,598 shares held by Mr. Marks in his own
name. The remaining shares are held by a family charitable foundation of
which Mr. Marks is a trustee and shares voting and investment power with
respect to said shares.
(6) Amount indicated represents 12,500 shares held by Mr. Joy in his own name.
The remaining shares are held by a family charitable foundation of which
Mr. Joy is a trustee and shares voting and investment power with respect to
said shares.
(7) Amount indicated represents 23,400 shares held by Mr. Beitzel in his own
name. The remaining shares are held by two trusts of which Mr. Beitzel and
his wife are trustees.
(8) Amount indicated includes 15,060 shares held by Mr. Campbell as custodian
for certain of his children and 2,998 shares owned by members of his
immediate family.
(9) Amount indicated includes options to purchase 16,250 shares which are or
will become exercisable within sixty (60) days.
(10) Amount indicated includes options to purchase 2,325 shares which are or
will become exercisable within sixty (60) days.
(11) Amount indicated includes options to purchase 10,014 shares which are or
will become exercisable within sixty (60) days.
(12) Amount indicated includes options to purchase 215,388 shares which are or
will become exercisable within sixty (60) days.
</TABLE>
4
<PAGE> 7
INFORMATION ABOUT MANAGEMENT
The Board of Directors.
During the fiscal year ended December 31, 1994, the Board of Directors held
a total of five (5) regularly scheduled meetings and seven (7) special meetings.
During 1994, the cash compensation of the outside directors of the Company
who were not officers consisted of a $10,000 annual retainer and a $1,000 fee
for attendance at each Board of Directors meeting. In addition, the Company
purchased 2,000 shares of its Common Stock on the open market for each outside
director as part of his or her annual compensation. The Chairperson of a
committee received $800 for attendance at each committee meeting and committee
members received $500 for attendance at committee meetings. Directors who are
not officers were also entitled to be reimbursed for expenses incurred while
serving as directors. Directors who are officers of the Company do not receive
additional compensation for their services as directors.
The Board of Directors has an Audit Committee which met three (3) times in
1994, a Compensation Committee which met seven (7) times in 1994 and a Directors
Affairs Committee which met four (4) times in 1994. In 1994 the composition of
the Audit Committee was Messrs. Crandall, Marks and Joy. In 1994 the composition
of the Compensation Committee was Messrs. Beitzel, Joy and Marks. In 1994 the
composition of the Directors Affairs Committee was Messrs. Beitzel, Joy and
Marks. The Audit Committee reviews the annual financial statements and scope of
the audit with the Company's independent accountants and is available to discuss
with them and the Company's Chief Financial Officer and internal auditor any
other audit-related matters which may arise during the year. They also review
the internal audit function. The Compensation Committee reviews and approves the
compensation of senior management and recommends to the Board of Directors stock
plans in which employees are eligible to participate. Members of the
Compensation Committee may not vote regarding their respective compensation. The
Directors Affairs Committee is responsible for the establishment of governance
policies concerning the Board of Directors of the Company. The Directors Affairs
Committee is also responsible for reviewing and approving the compensation of
directors subject to ratification by the Board of Directors. In 1994 the Board
of Directors appointed Paul W. Joy, lead director for communications with the
Chairman and Chief Executive Officer that require input from the outside
directors. Mr. Joy does not receive any additional remuneration in connection
with his service as lead director. The Board of Directors does not have a
nominating committee.
Compliance with Section 16(a) of the Securities Exchange Act of 1934.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission and the New York Stock Exchange initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Officers, directors and greater than ten percent
shareholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file.
To the Company's knowledge, based solely upon a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1994, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with, except that one
report covering one transaction was filed late by Charles A. Barbour, Vice
President of the Company.
5
<PAGE> 8
<TABLE>
Executive Compensation and Other Information.
The following table shows the annual and long-term compensation paid to the
Chairman and Chief Executive Officer, the four (4) highest compensated executive
officers and the former Chairman and Chief Executive Officer for services
rendered in 1994:
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM COMPENSATION
----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------------------------- ---------------------- -------
OTHER RESTRICTED
NAME AND ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
PRINCIPAL SALARY BONUS COMPENSATION AWARD(S) SARS PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($) ($) (2) (#) ($) ($) (6)
--------- ---- -------- -------- ------------ ---------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gale S. Fitzgerald 1994 $281,250 $100,000 $ 0 $0 42,000 $ 0 $2,310
Chairman of the Board 1993 $213,077 $117,500 $ 0 $0 101,000 $ 0 $4,497
and Chief Executive 1992 $175,000 $ 78,108 $ 0 $0 7,000 $ 0 $4,364
Officer
David N. Campbell (1) 1994 $307,228 $100,000 $ 63,858 $0 0 $ 0 $2,285
Former Chairman of the 1993 $300,000 $193,143 $ 0 $0 0 $ 0 $4,497
Board and Chief Executive 1992 $300,000 $282,229 $ 0 $0 0 $ 0 $4,364
Officer
G. David Baer 1994 $200,000 $ 50,000 $ 0 $0 0 $ 0 $ 0
Director and 1993 $180,000 $ 50,000 $ 0 $0 1,000 $ 0 $ 0
Executive Vice President 1992 $180,000 $ 46,000 $ 0 $0 2,000 $ 0 $ 0
Stephen A. Hoffman 1994 $160,000 $ 43,915 $ 0 $0 2,000 $ 0 $2,310
Vice President 1993 $133,000 $ 67,870 $ 0 $0 1,000 $ 0 $2,249
1992 $133,000 $ 58,024 $ 0 $0 7,000 $ 0 $2,182
Mark V. Megregian (3)(5) 1994 $190,000 $ 0 $ 0 $0 9,300 $ 0 $1,590
Vice President
Stuart C. Woodward (4)(5) 1994 $194,000 $ 0 $ 0 $0 4,300 $ 0 $2,310
Vice President 1993 $127,447 $102,028 $ 0 $0 8,750 $ 0 $2,310
- ---------------
<FN>
(1) On September 26, 1994, Mr. Campbell retired as Chairman and Chief Executive
Officer. Under a Non-Competition Agreement dated March 1, 1984, he will
receive an annual payment of $255,433 until October 2001. Mr. Campbell
received $63,858 under this agreement during 1994. On December 23, 1994, Mr.
Campbell's stock options expired in accordance with their terms.
(2) Under the 1991 Restricted Stock Plan, the payouts of the awards of
restricted stock were based upon the achievement of certain specified
earnings per share levels during the restricted periods, which began on
January 10, 1992 and on April 28, 1993, both of which were scheduled to end
on December 31, 1995. On March 25, 1994, the Board of Directors voted to
accelerate the restricted periods for the 1992 and 1993 awards of restricted
stock to end on April 2, 1994. As a result, targeted levels of EPS were not
attained thereby causing all shares to be forfeited.
(3) Mr. Megregian joined the Company as Vice President on January 4, 1994.
(4) Mr. Woodward was named an officer of the Company on November 2, 1993.
(5) During 1994, Messrs. Megregian and Woodward assumed new responsibilities and
had all of their incentive compensation included in their base compensation.
Their 1995 compensation plans reflect the Company's compensation policies
presently in effect.
(6) Consists of Company-matching contributions for the 401(k) Retirement Plan
and Trust.
</TABLE>
6
<PAGE> 9
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the Committee) of the Board of Directors is
composed of George B. Beitzel (Chairman), Paul W. Joy and Randolph A. Marks all
of whom are "disinterested persons" within the meaning of Rule 16b-3 of the
Securities Exchange Act of 1934, as amended. The Committee is responsible for
overseeing the administration of the Company's employee benefit plans and
establishing policies relating to the compensation of employees. This Committee
report describes the various components of the Company's executive officer
compensation program and the bases on which 1994 compensation was paid to such
executive officers including the executive officers named in the compensation
tables set forth in this Proxy Statement.
Compensation Policy -- The Committee's compensation policies are designed
to maintain a direct relationship among executive pay, financial performance of
the Company and the creation of shareholder value. Such policies seek to:
- Provide compensation opportunities which enable the Company to attract
and retain qualified executives;
- Provide compensation that is directly related to the performance of both
the Company and the individual;
- Integrate the compensation programs with the Company's annual and
long-term financial and operating objectives; and
- Align the interests of executive officers with the long-term interests of
the Company's stockholders through stock-based award opportunities that
can result in ownership of the Company's Common Stock.
The Company's executive compensation program attempts to achieve the
foregoing objectives by integrating annual base salary with annual cash and
stock-based incentives based on both Company and individual performance.
Measurement of Company performance is based on operating and financial
objectives set at the beginning of each year. As a result, executive
compensation tends to be higher in years in which the performance goals are
achieved or exceeded. In addition, as an executive's level of responsibility
increases, a greater portion of his or her annual compensation is based on
performance incentives and less on salary and employee benefits. Accordingly,
there will be greater variability in an executive's total compensation from year
to year based on both the individual's and the Company's actual performance.
Components of Executive Compensation -- The compensation paid to the
Company's executive officers during 1994, as reflected in the tables set forth
in this Proxy Statement, consisted of annual base salary, annual cash incentive
compensation, and long-term stock-based incentive compensation. At executive
management levels, the mix of compensation is weighted more toward the
performance-based components of annual cash incentives and long-term stock-based
incentives.
Annual Base Salary -- With respect to determining the base salary of
executive officers, the Committee takes into consideration a variety of factors
including the executive's level of responsibility and individual performance,
and the salaries of similar positions in the Company and in comparable companies
in our industry. The Company participates in and reviews various industry salary
surveys and has, from time to time, retained the services of an independent
consultant to assess comparable external salaries.
Annual Cash Incentive Compensation -- Each executive officer's total annual
compensation consists in part of annual cash incentive compensation. Awards of
cash incentive compensation are based on the attainment of one or more specified
targeted levels of (i) operating income, (ii) earnings per share, and (iii)
revenue. Also, the Committee may, in its sole discretion, make additional awards
of cash incentive compensation to executive officers based upon each
individual's attainment of specified objectives. The Committee, in awarding such
discretionary cash incentive compensation, considered the recipient's individual
contribution toward Company operating profit, earnings per share, stock price,
cost containment and the successful implementation of business strategy. The
objective of this form of annual compensation is to
7
<PAGE> 10
provide an incentive to certain executives to achieve operating and financial
objectives that the Committee believes are primary determinants of share price
over time. The Committee believes that operating and financial performance
criteria for annual cash incentive compensation are more appropriate than those
related to the market price of the Company's Common Stock since operating and
financial performance criteria bear a stronger and more direct relationship to
the performance of the Company.
Long-Term Stock-Based Incentive Compensation -- The third component of
executive compensation paid during 1994 consisted of grants of stock options
under the Company's 1991 Stock Option Plan. In making grants of stock options,
the Committee considered an executive's contribution toward past and future
Company performance. Any value that might be received from an option grant
depends upon increases in the price of the Company's Common Stock. Accordingly,
the amount of compensation to be received by an executive is directly aligned
with increases in shareholder value. Grants of stock options are made to key
employees of the Company who, in the opinion of the Committee, have had and are
expected to continue to have, a significant impact on the long-term performance
of the Company. Such awards are also intended to encourage such individuals to
remain with the Company and to further align their interests with those of the
Company's shareholders. The Committee strongly believes that stock ownership by
management and stock-based performance compensation are beneficial in aligning
management's and shareholders' interests in the enhancement of shareholder
value.
Stock Options Granted During 1994 -- The Committee granted stock options
during 1994 to various executive officers named in the following table (see
Options/SAR Grants in 1994). Recipients of such stock options received the right
to purchase shares of Common Stock of the Company in the future at a price equal
to their fair market value determined on the date of grant. Options granted as
incentive stock options under the Internal Revenue Code of 1986, as amended,
generally become exercisable in installments of 25 percent of the shares covered
by each grant commencing on the first annual anniversary date of the date of
grant and on each anniversary date thereafter. Such options may be exercised at
any time for a period of six (6) years after they first become exercisable.
Options granted as nonqualified stock options generally become exercisable in
installments of 20 percent of the shares covered by each grant, commencing on
the first annual anniversary date of the date of grant and on each anniversary
date thereafter. After they become exercisable, these options may be exercised
at any time for a period not to exceed fifteen (15) years from the date of
grant. The Committee considers an executive's contribution toward Company
performance, expected future contribution and the number of options and awards
presently held by an executive.
Chief Executive Officer Compensation -- The Committee, in setting the
compensation for the position of Chief Executive Officer during 1994, sought to
provide a compensation package which depended in part upon the attainment of
both annual and long-term objectives, thereby linking the annual compensation of
the CEO to individual performance and the Company's performance. Compensation
for the position of CEO consisted of (i) annual base salary set by the
Committee, (ii) cash incentive compensation tied to targeted levels of earnings
per share, (iii) long-term stock-based incentive compensation, and (iv)
discretionary cash incentive compensation based upon the factors described
above.
Ms. Fitzgerald's 1994 compensation consisted of (i) base compensation at
the rate of $275,000 per annum (increased to the rate of $300,000 per annum upon
her appointment as Chairman and Chief Executive Officer in October 1994 upon the
retirement of Mr. Campbell), (ii) long-term stock-based incentive compensation
consisting of stock options (42,000 shares at $8.00 per share awarded on April
27, 1994), and (iii) discretionary cash incentive compensation of $100,000 based
upon her attainment of specified objectives.
Mr. Campbell's 1994 compensation consisted of (i) base compensation at the
rate of $330,000 per annum prior to his retirement, and (ii) discretionary cash
incentive compensation of $100,000 based upon his attainment of specified
objectives.
Section 162(m) of the Internal Revenue Code -- Section 162(m) of the Code,
adopted as part of the Omnibus Budget and Reconciliation Act of 1993, generally
limits to $1 million the deduction that can be claimed by any publicly held
corporation for compensation paid to any "covered employee" in any taxable year
beginning after December 31, 1993. The term "covered employee" is defined as the
chief executive officer and the four other highest paid employees of the
corporation. At this time, it is not anticipated that any executive
8
<PAGE> 11
officer of the Company will receive total compensation in excess of $1 million
during 1995 for purposes of Section 162(m). The Committee will study whether it
is possible or desirable to cause compensation arrangements in the future to
qualify as deductible compensation. To the extent that the Committee's
compensation objectives can be achieved in a manner which maximizes the
deductibility of compensation paid by the Company, it will seek to do so.
SUBMITTED BY THE COMPENSATION COMMITTEE
George B. Beitzel Paul W. Joy Randolph A. Marks
Chairman
The Compensation Committee Report on Executive Compensation and the Stock
Performance Graph shall not be deemed incorporated by reference by any general
statement incorporating by reference this proxy statement into any filing under
the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the
extent the Company specifically incorporates this information by reference, and
shall not otherwise be deemed filed under such Acts.
COMPANY PERFORMANCE GRAPH
The following graph shows a five-year comparison of cumulative total
returns for the Company, the S&P 500 Index, and the S&P Computer Software &
Services Index assuming a base index of $100 at the end of 1989. The cumulative
total return for each annual period within the five years presented is measured
by dividing (i) the sum of (A) the cumulative amount of dividends for the
period, assuming dividend reinvestment, and (B) the difference between the
Company's share price at the end and the beginning of the period by (ii) the
share price at the beginning of the period.
<TABLE>
<CAPTION>
Computer Task S&P Computer
Measurement Period Group Software & S&P 500
(Fiscal Year Covered) Incorporated Services Index Index
- --------------------- --------------------------------------------
(in dollars)
<S> <C> <C> <C>
1989 100 100 100
1990 90.8 78.06 96.89
1991 92.67 118.99 126.42
1992 93.22 140.92 136.05
1993 78.99 179.86 149.76
1994 101.29 212.6 151.74
</TABLE>
9
<PAGE> 12
<TABLE>
Option/SAR Grants, Exercises and Holdings.
The following tables set forth certain information concerning stock options
granted and exercised during 1994, and unexercised options held as of the end of
1994, by the named executives:
OPTION/SAR GRANTS IN 1994
<CAPTION>
GRANT DATE
INDIVIDUAL GRANTS VALUE
- ------------------------------------------------------------------------------------------ ------------
NUMBER OF
SECURITIES PERCENT
UNDERLYING OF TOTAL
OPTIONS/SARS OPTIONS/SARS EXERCISE
GRANTED GRANTED TO OR BASE GRANT DATE
IN 1994 EMPLOYEES PRICE EXPIRATION PRESENT
NAME (#) (1) IN 1994 ($ PER SHARE) DATE VALUE ($)(2)
- ---- ------------ ------------ ------------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Gale S. Fitzgerald.......... 10,500 11.20% $ 8.00 4/27/01 $ 41,948
10,500 11.20% $ 8.00 4/27/02 $ 43,376
10,500 11.20% $ 8.00 4/27/02 $ 45,697
10,500 11.20% $ 8.00 4/27/04 $ 47,482
David N. Campbell........... -- -- -- -- --
G. David Baer............... -- -- -- -- --
Stephen A. Hoffman.......... 500 0.53% $ 8.00 4/27/01 $ 1,998
500 0.53% $ 8.00 4/27/02 $ 2,066
500 0.53% $ 8.00 4/27/03 $ 2,176
500 0.53% $ 8.00 4/27/04 $ 2,261
Mark V. Megregian........... 1,250 1.33% $ 8.00 1/21/01 $ 4,281
1,250 1.33% $ 8.00 1/21/02 $ 4,438
1,250 1.33% $ 8.00 1/21/03 $ 4,675
1,250 1.33% $ 8.00 1/21/04 $ 4,858
1,075 1.15% $ 6.875 3/25/01 $ 4,295
1,075 1.15% $ 6.875 3/25/02 $ 4,441
1,075 1.15% $ 6.875 3/25/03 $ 4,678
1,075 1.15% $ 6.875 3/25/04 $ 4,861
Stuart C. Woodward.......... 1,075 1.15% $ 8.00 4/27/01 $ 4,295
1,075 1.15% $ 8.00 4/27/02 $ 4,441
1,075 1.15% $ 8.00 4/27/03 $ 4,678
1,075 1.15% $ 8.00 4/27/04 $ 4,861
- ---------------
<FN>
(1) Options become exercisable in annual installments of 25 percent on each of
the first four anniversary dates from the date of grant.
(2) Option values reflect Black-Scholes model output for options. The
assumptions used in the model were expected volatility of .45, risk free
rate of return of 6.0%, dividend yield of 1.2%, and time to exercise of six
years.
</TABLE>
<TABLE>
AGGREGATE OPTION/SAR EXERCISES IN 1994 AND 1994 YEAR END OPTION/SAR VALUES
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
SHARES UNEXERCISED IN-THE-MONEY
ACQUIRED OPTIONS/SARS AT OPTIONS/SARS AT
ON VALUE 1994 YEAR END 1994 YEAR END
EXERCISE REALIZED --------------------------- ---------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gale S. Fitzgerald........ 5,250 $6,500 26,000 128,750 $44,513 $ 202,294
David N. Campbell......... 0 $ 0 0 0 $ 0 $ 0
G. David Baer............. 0 $ 0 42,750 2,250 $ 469 $ 1,156
Stephen A. Hoffman........ 0 $ 0 11,250 8,750 $13,906 $ 7,594
Mark V. Megregian......... 0 $ 0 0 9,300 $ 0 $ 13,763
Stuart C. Woodward........ 0 $ 0 7,000 13,800 $ 8,453 $ 16,345
</TABLE>
10
<PAGE> 13
Long-Term Incentive Plan Awards.
No awards were made to the named executives during 1994 under the Company's
1991 Restricted Stock Plan.
Executive Supplemental Benefit Plan.
Effective March 1, 1984, the Board of Directors adopted the Executive
Supplemental Benefit Plan (Supplemental Plan) to provide benefits to a select
group of management who contribute materially to the continued growth,
development and future business success of the Company. Generally, the
Supplemental Plan provides for retirement benefits of up to 50% of a
participating employee's base compensation at retirement, disability benefits of
up to 50% of an eligible participating employee's base compensation and pre-
retirement death benefits equal to 50% of a participating employee's base
compensation during the twelve-month period preceding death. Retirement benefits
and pre-retirement death benefits are paid during the 180 months following
retirement or death, respectively, while disability benefits are paid (subject
to reductions for disability benefits under the Company's basic and supplemental
disability plans and Social Security disability benefits) until normal
retirement age. The Supplemental Plan also provides for post-retirement death
benefits equivalent to the present value of the remainder of the 180 retirement
payments which are unpaid at the time of death.
A total of seven (7) current employees and fifteen (15) former employees
are presently covered by the Supplemental Plan. Benefits are based on service
credits earned for each year of employment prior to and subsequent to admission
to the Supplemental Plan. Mr. Campbell's benefits were fully vested at 50% of
his base compensation at the time of his retirement. At normal retirement age,
Mr. Campbell will receive an annual retirement benefit of $165,000, Mr. Baer
will receive $100,000, Mr. Hoffman will receive $17,600, and Ms. Fitzgerald will
receive $30,000 and all executive officers as a group will receive annual
retirement benefits of $734,000.
Two former executive officers received early retirement benefits under the
Supplemental Plan during 1994 totalling $151,050.
The Company has purchased, and is the beneficiary of, insurance on the
lives of certain participants in the Supplemental Plan. Under the insurance
program, if the assumptions made as to mortality experience, policy dividend and
other factors are realized, the proceeds of the policies will reimburse the
Company for all costs of the Supplemental Plan, including benefits, insurance
premiums and a factor for the use of the Company's money.
As of December 1, 1994, base compensation and service credits used to
determine retirement benefits for Supplemental Plan participants were frozen. As
a result of this action, the Company expects to reduce its annual Supplemental
Plan expense from approximately $1.1 million to $600,000. No new participants
will enter the Supplemental Plan as a result of the imposition of the freeze.
In addition, the Company amended various provisions of the Supplemental
Plan. One of the amendments changed the pre-retirement death benefit formula to
the same formula that is used to calculate normal and early retirement benefits.
Prior to December 1, 1994, the pre-retirement death benefit formula was based on
50% of the total of base and incentive compensation. The offset against
pre-retirement death benefits for Company insurance proceeds received, which in
some cases included an offset for insurance purchased by employees with their
own funds, was eliminated. Disability benefits payable to employees covered
under the Supplemental Plan were reduced. In the event an employee covered under
the Supplemental Plan is disabled, short-term disability payments will be paid
pursuant to Company policy. Thereafter, the disability benefit is paid under the
Supplemental Plan based upon 50% of the disabled participant's base compensation
at the time of disability. Prior to December 1, 1994, the disability benefit
formula was based on 60% of base plus 50% of incentive compensation. The
disability provision only affects current employees.
Normal retirement age for a member of the Supplemental Plan who does not
participate in a successor plan at any time continues to be age 60. For any
member who participates in a successor plan, normal retirement age is increased
to 65. Early retirement age for a member who does not participate in a successor
11
<PAGE> 14
plan continues to be age 55. For any member who participates in a successor
plan, the early retirement age is increased to age 60.
The early retirement benefit for a participant who does not participate in
any successor plan continues to be discounted at 4% annually. For any
participant who participates in a successor plan, the discount rate is based on
the Pension Benefit Guarantee Corporation immediate annuity rate averaged for
the twelve months preceding the date benefits begin. The Supplemental Plan was
also amended to provide that in the event of a change of control, participants
employed at such time shall be entitled to receive a lump sum benefit equivalent
to the present value of 50% of their base compensation as of the date of the
change of control. This amount will be calculated for a period of no less than
fifteen (15) years or the life of the participant, whichever is longer. A change
of control will occur if (i) any person as such term is used in Sections 13(d)
and 24(d) of the Securities Exchange Act of 1934, as amended, (other than the
Company, any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or any company owned, directly or indirectly, by
the stockholders of the Company in substantially the same proportions as the
ownership of stock of the Company) is or becomes the beneficial owner, (as
defined in Rule 13d-3 under the Exchange Act) directly or indirectly, of
securities of the Company representing 30% or more of combined voting power of
the Company's then outstanding voting securities; (ii) during any period of
twenty-four (24) consecutive months, individuals who at the beginning of such
period constitute the Board and any new director whose election by the Board, or
whose nomination for election by the Company's stockholders, was approved by a
vote of at least of two-thirds (2/3) of the directors (other than in connection
with the contested election), before the beginning of the period cease, for any
reason, to constitute at least a majority thereof; or (iii) the stockholders of
the Company approve a plan of complete liquidation of the Company or the sale or
disposition by the Company of all or substantially all of the Company's assets
unless the acquirer of the assets or its directors shall meet the conditions for
a merger or consolidation described in the Supplemental Plan. Upon a change of
control, on the basis of present base compensation, all executive officers as a
group would receive a maximum of $3,603,000.
Non-Competition Agreements.
On March 3, 1984, Messrs. Baer, Campbell, Courtney and Marks entered into
non-competition agreements with the Company pursuant to which each agreed that
until attaining the age of 60, or the date of their respective deaths, if
earlier, each would refrain from undertaking any activities in competition with
the business activities of the Company, refrain from activities which would be
detrimental to the Company's business or reputation, and keep confidential
information of the Company's business and operations. Payments to each
individual under the agreement will be fully offset by any payment or other
benefit received from the Company for so long as the individual continues to be
a full-time employee. Mr. Baer, who retired as an officer of the Company in
March 1986, received an annualized sum of $85,000 during the period of his
retirement. Upon his return to the Company in June 1988, Mr. Baer entered into a
new non-competition agreement with the Company, pursuant to the terms of which
he will receive the greater of $90,000 or one-half the amount of his base
compensation as of the day of his separation from the Company. Under the terms
of his agreement, Mr. Campbell was entitled to receive payments based upon 50%
of his total compensation for the preceding twelve (12) months at the time of
his resignation or termination as a full-time employee of the Company. Following
his retirement, Mr. Campbell commenced receiving payments under his Agreement
effective November 1, 1994, at an annual rate of $255,433. Following retirement,
the agreements of Messrs. Baer, Campbell, Courtney and Marks also provide for
continued medical benefits comparable to those provided other officers of the
Company for defined periods. All agreements provide for payment of the premiums
on a life insurance policy in the face amount of $300,000 for the respective
individual (which is offset by the amount of any other Company-financed
insurance policy). The non-competition agreement pertaining to Mr. Marks is
discussed in the Compensation Committee Interlocks and Insider Participation
section of this Proxy Statement.
On July 1, 1993 the Company entered into a non-competition agreement with
Ms. Fitzgerald upon her appointment as President and Chief Operating Officer.
This Agreement remained in place following her appointment as Chairman and Chief
Executive Officer in October, 1994. Under the terms of the agreement, Ms.
Fitzgerald, following the termination of her employment relationship with the
Company, is to refrain for a defined period from undertaking any activities in
competition with the business activities of the Company,
12
<PAGE> 15
including the solicitation or recruitment of Company employees, or the use or
disclosure of confidential information concerning the Company's business and
operations. Under the terms of the agreement, the Company agrees not to
terminate Ms. Fitzgerald's employment with the Company unless the Company gives
her twelve (12) months prior notice of such termination, or pays to her, an
amount equal to twelve (12) months total compensation to be paid to her under
the terms of any then existing compensation plan in effect between the Company
and her. Pursuant to the terms of the agreement, the Company agreed that in the
event Ms. Fitzgerald has not secured an employment or a contractual position, of
six months or more, in an executive management capacity, at the expiration of
the twelve (12) month period following the date of separation, the Company will
pay her up to an additional six (6) months of total compensation calculated on
the basis of the last compensation plan in effect between the Company and Ms.
Fitzgerald.
Severance Compensation Agreements.
On October 31, 1994, the Company entered into severance compensation
agreements with Ms. Fitzgerald and Mr. Baer. Generally, the separation
agreements provide that in the event Ms. Fitzgerald or Mr. Baer are employed by
the Company at the time of a change of control, and are subsequently terminated
within two (2) years following change of control, they will be entitled to
receive a lump sum severance payment of their respective average annual
compensation for the five (5) calendar years preceding the change of control,
multiplied by 2.99.
Under the severance compensation agreements, a change of control is defined
as (i) approval by the holders of the Common Stock of any consolidation or
merger of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the Common Stock are converted into
cash, securities or other properties, other than a merger of the Company in
which the holders of the Common Stock immediately prior to the merger own in
excess of 66 2/3% of the outstanding voting securities of the surviving
corporation immediately after the merger, (ii) approval by the holders of the
Common Stock of any sale, lease, exchange or other transfer in one transaction
or a series of related transactions of all or substantially all of the assets of
the Company other than a transfer of the Company's assets to a majority-owned
subsidiary of the Company, (iii) approval by the holders of the Common Stock of
any plan or proposal for the liquidation or dissolution of the Company; or (iv)
any person (other than the Company, or any entity owned or controlled by the
Company), becomes a beneficial owner of securities of the Company representing
30% or more of the combined voting power of the Company's outstanding voting
securities.
Non-Qualified Key Employee Deferred Compensation Plan.
On February 2, 1995 the Compensation Committee of the Board of Directors
approved the creation of a non-qualified Key Employee Deferred Compensation Plan
(Deferred Plan). The Deferred Plan is intended as a successor plan to the
Supplemental Plan.
The Chairman and Chief Executive Officer, subject to the approval of the
Compensation Committee, recommends (i) those key employees who will be eligible
to participate and (ii) the percentage of a participant's base and bonus
compensation which will be contributed each year to the Deferred Plan if the
Company attains annual defined performance objectives set by the Chairman.
Eligible participants may defer a percentage of their own compensation and
Company provided contributions or both. All amounts credited to the participant
shall be invested, as determined by the Compensation Committee and the
participant shall be credited with actual earnings of the investments. Company
contributions, including investment earnings, may be cash or the stock of the
Company.
Prior to December 31, 2002, participants shall be granted pro rata vesting
in Company contributions at the rate of 12.5% per year. If a participant
terminates employment due to death, disability, retirement at age 65, or in the
event a change of control (as defined in the CTG Executive Supplemental Benefit
Plan previously recited) shall occur, the participant or his or her estate shall
be entitled to receive the benefits accrued for the participant as of the date
of such event. Company contributions will be forfeited, even if vested, in the
event a participant violates a non-competition agreement or separates from
service prior to December 31, 2002. Participants will be 100% vested in their
own contributions. All amounts in the Deferred Plan, including
13
<PAGE> 16
elective deferrals, are held as general assets of the Company and are subject to
the claims of creditors of the Company.
Directors' and Officers' Liability Insurance.
The Company indemnifies its directors and officers as permitted by law in
connection with civil and criminal proceedings against them by reason of their
service as a director or officer. As permitted by Section 726 of the New York
Business Corporation Law, the Company has purchased directors' and officers'
liability insurance to provide indemnification for the Company and all its
directors and officers. The current liability insurance policy, with a policy
period effective April 1, 1995, was issued by Great American Insurance Company
at an annual premium of approximately $120,000.
Indebtedness of Management.
At the annual meeting of shareholders held on April 29, 1992, the
shareholders approved the Computer Task Group, Incorporated Management Stock
Purchase Plan (the Plan). The purpose of the Plan is to promote the long-term
growth and profitability of the Company by significantly increasing ownership of
the Company's Common Stock by key employees who are expected to make significant
contributions to the successful conduct of the business and affairs of the
Company. By significantly increasing their share ownership, the Company expects
that the Plan will enhance its ability to attract and retain such individuals
and that they will further identify their interests with those of the Company's
shareholders. The Plan is administered by the Compensation Committee who has the
exclusive right to determine which key employees are eligible to participate in
the Plan, as well as the amount to be loaned to such employees for purposes of
acquiring shares under the Plan.
Under the Plan, eligible participants may purchase shares of the Company's
Common Stock either directly from the Company or on the open market in brokers'
transactions. The Company may, at the request of a Plan participant and subject
to the approval of the Compensation Committee, lend an amount not to exceed the
base compensation paid to such participant in the calendar year immediately
preceding the year in which such purchase occurs. Amounts loaned to Plan
participants may be used only for purposes of acquiring shares under the Plan.
Each loan is evidenced by a promissory note for the amount borrowed and bears
interest at a market rate. All amounts payable with respect to each note are
secured by each participant's pledge of Common Stock acquired with the loan
proceeds.
During 1992, Messrs. Stephen A. Hoffman and Joseph G. Makowski, borrowed
$132,998 and $73,997, respectively, to purchase shares under the Plan. During
1993, David N. Campbell, and Gale S. Fitzgerald, borrowed $162,500 and $97,500,
respectively, to purchase shares under the Plan. Each of the foregoing loans is
for a term of three years with principal to be paid in full at the end of the
term and bears interest at 4 percent per year. During 1994, the largest
aggregate amount of such indebtedness for each of Messrs. Hoffman, Makowski and
Campbell and Ms. Fitzgerald was $132,998, $73,997, $162,500 and $ 97,500,
respectively. During 1994, Messrs. Hoffman and Makowski and Ms. Fitzgerald
repaid $88,997, $73,997 and $37,000, respectively, on their loans. As of March
15, 1995 Messrs. Hoffman, Makowski and Campbell and Ms. Fitzgerald owed $44,001,
$0, $162,500 and $60,500, respectively, under the Plan.
Compensation Committee Interlocks and Insider Participation.
Mr. Marks, a director of the Company and member of its Compensation
Committee, served as Chairman of the Company's Board of Directors from the time
of its organization in 1966 until March 1984. He was President of the Company
from 1966 until June 1979 when he became Chief Executive Officer, a position he
held until March 1984. Mr. Marks was engaged by the Company as a consultant from
March 1984 until December 1985. On March 3, 1984 Mr. Marks entered into a
non-competition agreement with the Company, the terms of which are the same as
those applicable to Messrs. Campbell, Courtney and Baer described under the
caption "Non-Competition Agreements". Mr. Marks, who retired as an officer of
the Company in March 1984, receives an annual sum of $90,000 under his
non-competition agreement. Mr. Marks also receives the same medical benefits and
payment of life insurance premiums set forth in the section described above.
14
<PAGE> 17
PROPOSAL TO AMEND THE COMPUTER TASK GROUP, INCORPORATED
1991 EMPLOYEE STOCK OPTION PLAN
At the annual meeting, shareholders are being asked to consider and take
action upon a proposal to approve amendments to the Computer Task Group,
Incorporated 1991 Employee Stock Option Plan (Option Plan). The amendments will
(i) increase the number of shares available for grants of options under the
Option Plan by 500,000 shares, (ii) provide for initial one-time grants of
nonqualified stock options covering 5,000 shares of Common Stock to "New Outside
Directors", (iii) enable the Compensation Committee to set the option price for
nonqualified options (other than grants to New Outside Directors) to be other
than their fair market value, and (iv) make such other amendments described
below. The full text of the Option Plan is attached at the end of this Proxy
Statement as Appendix A and shareholders are urged to refer to it for a complete
description of the Option Plan, as amended. The following summary is qualified
in its entirety by reference to the full text of the Option Plan.
The purpose of the Option Plan is to provide key employees of the Company
and its subsidiaries and New Outside Directors additional incentive to continue
and increase their efforts on the Company's behalf and to remain in the employ
of the Company. The granting of stock options also encourages such individuals
to increase their equity interest in the Company.
As originally approved by the Company's shareholders, on April 24, 1991,
options covering 500,000 shares of Common Stock may be granted under the Option
Plan. One of the amendments to the Option Plan which is being submitted for
shareholder approval will increase the number of shares issuable thereunder from
500,000 to 1,000,000 shares. From the inception of the Option Plan to March 15,
1995, eligible participants received options covering 499,575 shares of Common
Stock. Approximately 100 individuals are currently eligible to participate in
the Option Plan.
Another amendment to the Option Plan provides that "New Outside Directors"
will receive a one-time grant of nonqualified stock options to purchase up to
5,000 shares of the Company's Common Stock. The term "New Outside Director" is
defined to mean a person who (i) is appointed or elected to the Board of
Directors after January 1, 1993, (ii) will be a nonemployee director after such
appointment or election, and (iii) was not a member of the Board for a
continuous period of one hundred eighty days prior to such appointment or
election.
The Option Plan was further amended to enable the Compensation Committee to
designate the exercise price for nonqualified options to be other than the fair
market value of the shares on the date of grant and limit the number of options
that may be granted to an individual during a calendar year to 250,000 shares.
The option price for incentive stock options and grants to New Outside Directors
may not be less than the fair market value of the Common Stock on the date an
option is granted. As of March 15, 1995, the closing price of the Common Stock
as reported by the New York Stock Exchange -- Composite Transactions Listing was
$10.00 per share. The price of shares purchased pursuant to the exercise of an
option may be paid in the form of cash, Common Stock or combination thereof
having an aggregate fair market value equal to the total exercise price.
Finally, the definition of "Change of Control" set forth in Article IX of
the Option Plan was further defined so to make clear what events constitute a
change of control. See discussion under Excecutive Supplemental Benefit Plan
previously described for definition of Change of Control.
Options granted under the Option Plan are exercisable in one or more
installments for such periods as determined by the Compensation Committee, but
in no event may the expiration date of an incentive stock option be later than
the day preceding the tenth (10th) anniversary of the date of grant. Shares
acquired by persons subject to Section 16(b) of the Securities Exchange Act of
1934, as amended, pursuant to the exercise of an Option or portion thereof, may
not be sold or transferred for at least six (6) months after the date of grant.
The Option Plan is administered by the Compensation Committee which has the
authority to amend, suspend or terminate the Option Plan. However, no amendment
may be made which would, without the prior approval of the shareholders, (i)
materially increase the benefits accruing to participants under the Option Plan,
(ii) materially increase the number of securities which may be issued under the
Option Plan, or (iii)
15
<PAGE> 18
materially modify the requirements as to eligibility for participation in the
Option Plan. In addition, the Compensation Committee may replace any existing
option and in connection therewith require the voluntary surrender of all or a
portion of any option granted as a condition precedent to the grant of a
replacement option.
Options are not transferable by a recipient other than by will or the laws
of descent and distribution. In the event a recipient ceases to be employed by
the Company or its subsidiaries by reason of disability or other than with
cause, each option will continue to be exercisable according to its terms, but
in no event may an option be exercised more than eighty-nine days after the date
of termination. In the event a recipient ceases to be employed by reason of
death, his or her option shall extend only to those shares which were
immediately purchasable on the date of death and such option shall expire unless
exercised by the recipient's legal representatives or beneficiaries within
twelve months after the date of death. A recipient's right to exercise an option
will terminate immediately in the event his or her employment is terminated with
cause, he or she improperly discloses confidential information, violates the
terms of any non-disclosure or non-solicitation agreement with the Company, or
renders services for a competitor of the Company without the prior consent of
the Compensation Committee.
Options may be either "incentive stock options" or "nonqualified stock
options" as determined under the Internal Revenue Code of 1986, as amended (the
Code). To the extent that options qualify as incentive stock options under
Section 422 of the Code, there is no taxable income to the recipient when the
option is granted or exercised. If a recipient exercises an incentive stock
option and does not dispose of those shares within one year of the date the
shares were transferred to him or her, or within two years from the date of the
granting of the option (the Waiting Period), any gain realized upon disposition
may be taxable to the recipient as long-term capital gain. If a recipient
disposes of his incentive stock option shares prior to the expiration of the
Waiting Period, he or she will generally recognize ordinary income in the year
of sale in an amount equal to the excess, if any, of (i) the lesser of (a) the
fair market value of the shares as of the date of exercise or (b) the amount
realized on the sale, over (ii) the option exercise price. Any additional amount
realized on the disposition during such time period may be treated as either
long-term or short-term capital gain depending on the length of time the
recipient held the shares. The Company will not be entitled to a deduction as a
result of the grant of an incentive stock option, the exercise of such an option
or the sale of the underlying shares after the Waiting Period. If a recipient
disposes of the underlying shares prior to the expiration of the Waiting Period,
the Company may be entitled to deduct an amount equal to the ordinary income
recognized by the recipient.
To the extent options are treated as nonqualified stock options, there is
no taxable income to the recipient at the time of grant. A recipient will
recognize income on the date of exercise of a nonqualified stock option equal to
the difference between (i) the fair market value on the date of exercise and
(ii) the exercise price. The income recognized by a recipient on the exercise of
the option is subject to withholding taxes. The Company may be entitled to a
deduction equal to the amount of ordinary income recognized by a recipient on
the exercise of a nonqualified stock option.
The foregoing is merely a summary and does not purport to be a complete
description of the federal income tax aspects of the Option Plan.
The proposed amendments to the Option Plan were authorized at the February
3, 1995 meeting of the Board of Directors, subject to the approval and
ratification by the shareholders at the annual meeting. The favorable vote of
the holders of a majority of all outstanding shares entitled to vote at the
meeting is required for adoption of the amendment to the Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL
OTHER INFORMATION
Proxy Solicitation.
A shareholder giving a proxy may revoke it at any time before it is
exercised. The cost of soliciting proxies in the accompanying form is to be
borne by the Company. In addition to solicitations by mail, employees of the
Company (who will not be specifically compensated for such services) may solicit
proxies in person or by
16
<PAGE> 19
telephone. Arrangements will be made with brokers, custodians, nominees and
fiduciaries to forward proxies and proxy soliciting material to the beneficial
owners of the Company's shares, and the Company may reimburse such brokers,
custodians, nominees or fiduciaries for their expenses in so doing. In addition,
Corporate Investor Communications, Inc. has been retained by the Company to
assist in the solicitation for which it will be paid a fee of approximately
$2,500 plus reasonable out of pocket expenses.
Relationship with Independent Public Accountants.
Price Waterhouse LLP, which has been the independent accounting firm
auditing the financial statements of the Company since 1977, has been selected
by the Board of Directors as the independent auditors of the Company. A
representative of Price Waterhouse will be present at the annual meeting of
shareholders of the Company. The representative will be given the opportunity to
make a statement if he desires to do so, and will be available to respond to
appropriate questions. No member of that firm has any past or present interest,
financial or otherwise, direct or indirect, in the Company or any of its
subsidiaries. Matters involving auditing and related functions are considered
and acted upon by the Audit Committee.
SHAREHOLDER PROPOSALS
Proposals of shareholders which are intended to be included in the
Company's Proxy Statement relating to its 1996 annual meeting of shareholders
must be received at the Company's principal executive offices not later than
November 26, 1995.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors of the
Company knows of no other business which will be presented for consideration at
the 1995 annual meeting of shareholders. However, if any other matters properly
come before the meeting or any adjournment thereof, it is intended that the
shares represented by proxies will be voted with respect thereto in accordance
with the judgment of the holders of the proxies.
By Order of the Board of Directors.
Dated: March 27, 1995
17
<PAGE> 20
EXHIBIT A
COMPUTER TASK GROUP, INCORPORATED
1991 EMPLOYEE STOCK OPTION PLAN
(FIRST AMENDMENT AND RESTATEMENT)
ARTICLE I
DEFINITIONS
1.1. For purposes of this Plan:
(a) The term "Board" shall mean the Board of Directors of the Company.
(b) The term "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(c) The term "Committee" shall mean the Compensation Committee of the
Board. The Committee shall be composed of not less than two directors, all
of whom are "disinterested persons" within the meaning of Rule 16b-3 as
promulgated under the Securities Exchange Act of 1934, as amended.
(d) The term "Common Stock" shall mean the common stock, par value
$.01 per share, of the Company and any shares of stock or other securities
received as a result of the adjustments contemplated in this Plan.
(e) The term "Company" shall mean Computer Task Group, Incorporated.
(f) The term "Disability" shall mean permanent and total disability as
defined in Section 22(e)(3) of the Code.
(g) The term "Fair Market Value" shall mean with respect to any given
day, the closing price of the Common Stock as reported by the New York
Stock Exchange -- Composite Transactions Listing for the date as of which
value is to be determined or if there is no closing price for that date,
then on the last preceding date on which such closing price was reported.
(h) The term "Initial Grant" shall mean the grant of an Option to a
New Outside Director pursuant to Section 7.1 hereof.
(i) The term "ISO" shall mean an incentive stock option as defined in
Section 422 of the Code or any successor provision.
(j) The term "New Outside Director" shall mean a person who (i) is
appointed or elected to the Board after January 1, 1993, (ii) will be a
nonemployee director after such appointment or election and (iii) was not a
member of the Board for a continuous period of one hundred eighty (180)
days prior to such appointment or election. Such term does not include
either (i) an employee director who terminates employment with the Company
but remains a member of the Board or (ii) an employee director who
terminates employment with the Company and is then reelected to the Board
without there being an intervening period of one hundred eighty (180) days
during which such person is not a member of the Board.
(k) The term "NQSO" shall mean an Option that does not comply with the
requirements set forth in Section 422 of the Code or any successor
provision.
(l) The term "Option" shall mean any option granted under this Plan
including an Initial Grant.
(m) The term "Optionee" shall mean any person to whom an Option has
been granted.
(n) The term "Option Agreement" shall mean an agreement entered into
by the Optionee and the Company setting forth the terms of the Option as
set forth in Article VIII and such other terms and conditions as may be
required by the Committee.
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(o) The term "Plan" shall mean the Computer Task Group, Incorporated
1991 Employee Stock Option Plan, as amended from time to time.
(p) The term "Subsidiary" shall have the meaning as set forth in
Section 425 of the Code or any successor provision and shall include any
corporation which becomes a subsidiary after the date of adoption of the
Plan.
(q) The term "With Cause" shall mean conduct wherein an Optionee has
willfully engaged in acts considered by the Committee to be injurious to
the Company or its Subsidiaries or the continuing failure by an Optionee to
perform his or her duties.
ARTICLE II
PURPOSE
2.1. The purpose of the Plan is to provide key employees of the Company and
its Subsidiaries and New Outside Directors upon whose efforts the Company is
largely dependent for the successful conduct of its business, additional
incentive to continue and increase their efforts on the Company's behalf and to
remain in the employ of the Company or its Subsidiaries. In addition, the Plan
is designed to increase the ability of the Company to attract and retain
individuals of exceptional skill upon whom its progress, growth and
profitability depend.
ARTICLE III
EFFECTIVE DATE AND EXPIRATION OF PLAN
3.1. The Plan was adopted by the Board effective as of January 25, 1991 and
was approved and ratified by the shareholders of the Company on April 24, 1991.
Options may not be granted under the Plan after April 23, 2001, but the period
for exercise of Options granted prior to April 23, 2001, may extend beyond that
date.
ARTICLE IV
ELIGIBILITY
4.1. Options may be granted by the Committee only to key employees of the
Company and its Subsidiaries and to New Outside Directors. Key employees will,
in general, be those employees in positions of responsibility whose business
decisions, in the sole judgment of the Committee, contribute to the overall
success of the Company.
ARTICLE V
SHARES SUBJECT TO THE PLAN
5.1. The total number of shares of Common Stock for which Options may be
granted under this Plan shall not exceed 1,000,000 shares, subject to adjustment
in accordance with Article IX hereof. Such shares may be authorized and unissued
shares, treasury shares or both, as the Board may from time to time determine.
In the event an Option granted under the Plan or portion thereof expires,
terminates or is cancelled for any reason without having been exercised, the
underlying shares with respect to such Option shall be available for future
grants of Options.
ARTICLE VI
ADMINISTRATION
6.1. The Committee shall have full and exclusive authority to administer,
construe and interpret the Plan, and to adopt such rules, regulations and
guidelines and perform such other acts relating to the Plan, including the
delegation of administrative responsibilities which it believes reasonable and
proper.
6.2. The Committee shall have the exclusive right to grant Options pursuant
to the terms of the Plan and shall, in its sole discretion, determine which key
employees shall be granted Options, the number of shares of
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<PAGE> 22
Common Stock subject to any such Options, the duration for which such Options
may be exercised and the terms and conditions of the Options. All claims by
Optionees arising under the Plan shall be presented to the Committee. The acts
and decisions of the Committee with respect to any questions arising in
connection with the administration and interpretation of the Plan, including the
severability of any and all of the provisions hereof shall be conclusive, final
and binding. Employees of the Company and its Subsidiaries shall not have any
claim or right to be granted an Option and there shall be no obligation on the
part of the Committee, in granting Options, to treat eligible employees
uniformly.
ARTICLE VII
INITIAL GRANTS TO NEW OUTSIDE DIRECTORS
7.1 An Option to purchase 5,000 shares of Common Stock shall be granted to
each New Outside Director upon the earlier of (i) the day of the Company's
annual meeting of shareholders at which the First Amendment and Restatement of
this Plan is approved and ratified by the Company's shareholders and such
director is serving as such, (ii) the day of the Company's annual meeting of
shareholders at which such director is first elected or (iii) the day of the
first annual meeting of shareholders after such New Outside Director is first
appointed by the Board to be a director, whichever is applicable; provided, that
if a New Outside Director who previously received such an Initial Grant
terminates his or her service as a director and is subsequently elected or
appointed to the Board, such director shall not be eligible to receive a second
Initial Grant.
ARTICLE VIII
TERMS AND CONDITIONS OF OPTIONS
8.1. Incentive and Nonstatutory Options. Options granted by the Committee
shall be designated as either (i) ISOs or (ii) NQSOs. Options which are intended
to be ISOs shall be designated as such by the Committee. In no event shall a New
Outside Director receive an ISO unless otherwise permitted under the Code.
Grants of an Option for fractional shares shall not be made.
8.2. Option Price. The price at which Common Stock may be purchased upon
exercise of an Option shall be established by the Committee on the date of
grant, but in no event may the price be less than the par value of such shares.
Notwithstanding the foregoing, the option price per share for an ISO or an
Initial Grant shall be the Fair Market Value of a share of Common Stock on the
date of grant of such ISO or Initial Grant.
8.3. Period of Option. The Committee shall determine the dates after which
Options may be exercised, including whether such Options shall be exercisable in
installments. The Committee may amend an Option to accelerate the dates after
which Options may be exercised. In no event shall the expiration date of an ISO
be later than the day preceding the tenth annual anniversary of the date on
which the ISO was granted.
8.4. Transfer of Option Shares. Except as otherwise set forth in this Plan,
shares acquired by persons subject to Section 16(b) of the Securities Exchange
Act of 1934, as amended, pursuant to the exercise of an Option or portion
thereof, shall not be sold or transferred for at least six months after the date
of grant.
8.5. Option Agreement. Options granted pursuant to this Plan shall be
evidenced by written Option Agreements executed by both the Company and the
Optionee. Option Agreements shall be subject to the terms and conditions of the
Plan and shall contain such other provisions the Committee may deem advisable
and which are not inconsistent with the terms hereof. Option Agreements shall
state the total number of shares of Common Stock subject to each grant, the
purchase price of a share of Common Stock under an Option, the expiration date
for the Option and whether the Option is an ISO or a NQSO.
8.6. ISOs Granted to Ten Percent Shareholder Employees. Notwithstanding
anything in this Plan to the contrary, the Committee may not grant an ISO to any
employee who, at the time the ISO is granted, owns (through application of
attribution rules set forth in Code Section 425 (d)) more than ten percent of
the total combined voting power of all classes of stock of the Company or its
Subsidiaries, unless (i) the option price is at least 110 percent of the Fair
Market Value of a share of Common Stock on the date the Option is granted
A-3
<PAGE> 23
and (ii) the expiration date of the Option is a date not later than the day
preceding the fifth annual anniversary of the date on which the Option is
granted.
8.7. Exercise of Option. Each Option or portion thereof shall be exercised
by delivery of a written notice of exercise to the Company on a form to be
provided by the Company together with payment of the full price of the shares
being acquired pursuant to the Option. An Optionee may exercise an Option with
respect to less than the full number of shares for which an Option may then be
exercised, but in no event may an Optionee exercise an Option with respect to a
fractional share. The price of shares purchased pursuant to the exercise of an
Option or portion thereof, may be paid (i) in United States dollars in cash or
by check or bank draft payable to the order of the Company; (ii) through the
delivery of shares of Common Stock with an aggregate Fair Market Value on the
date of exercise equal to the option price; or (iii) by any combination of the
above; provided, however, that the Committee shall determine acceptable methods
for tendering Common Stock as payment upon exercise of an Option and may, in its
discretion, limit or prohibit the use of Common Stock to pay the option price.
8.8. Nontransferability of Options. Options granted pursuant to the Plan
shall not be transferable by any Optionee other than by will or the laws of
descent and distribution.
8.9. Termination of Employment. If an Optionee ceases to be employed by the
Company or its Subsidiaries, the following rules shall apply:
(a) Termination by reason of Death. Upon the death of an Optionee
while employed by the Company or its Subsidiaries, his or her Option shall
extend only to those shares which were immediately exercisable by him or
her on the date of his or her death, and such Option shall expire unless
exercised by his or her legal representatives or beneficiaries within
twelve months after the date of his or her death. This provision shall not
have the effect of extending the period of any Option.
(b) Termination by reason of Disability. If an Optionee shall cease to
be employed by the Company or its Subsidiaries by reason of Disability,
each Option held by the Optionee shall be exercisable at any time in whole
or in part up to the expiration date specified in the grant of such Option,
but in no event may an Option be exercised more than eighty-nine days after
the date of termination.
(c) Termination other than by reason of Death or Disability or With
Cause. If an Optionee shall cease to be employed by the Company or its
Subsidiaries for any reason other than Death, Disability or With Cause,
each Option held by the Optionee shall be exercisable according to its
terms, but in no event may an Option be exercised more than eighty-nine
days after the date of termination.
(d) Immediate Cancellation. Notwithstanding anything herein to the
contrary, each Option held by an Optionee shall immediately terminate in
the event that (i) an Optionee, without the prior written consent of the
Committee (A) discloses any confidential information regarding the Company
or its Subsidiaries to anyone outside the Company or uses such information
other than in connection with services rendered to or on behalf of the
Company, (B) renders services for any entity or otherwise engages in any
business activity, directly or indirectly, which in the sole judgment of
the Committee is or becomes competitive with the Company or which is or
becomes otherwise in conflict with the interests of the Company, or (C)
violates the terms of any non-solicitation and non-disclosure agreement
between the Optionee and the Company, or (ii) an Optionee's employment with
the Company or a Subsidiary terminates With Cause.
8.10. Withholding. The Company may make such provisions and take such steps
as it deems necessary or appropriate for the withholding of any taxes which the
Company is required by law or regulation of any governmental authority to
withhold in connection with any Option or the exercise thereof.
8.11. Notification of Sale. Optionees shall immediately notify the Company
in writing of any disposition and the amount realized thereon to the extent any
Optionee disposes of shares of Common Stock acquired upon the exercise of an ISO
(i) within two years after the date of the grant of the ISO under which the
stock was acquired or (ii) within one year after the transfer of such shares to
the Optionee.
8.12. Limitation on ISOs. The aggregate Fair Market Value (determined as of
the date an Option is granted) of the shares of Common Stock for which any
employee may first exercise Options granted under
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<PAGE> 24
this Plan and all other stock option plans of the Company and its Subsidiaries,
in any calendar year, shall not exceed $100,000 plus any unused carryover to
such year. The unused carryover limit in any calendar year shall be determined
in accordance with Section 422 of the Code.
8.13 Limitation on Awards of Options. Notwithstanding any other provision
of this Plan, an Optionee shall not receive an Option covering more than 250,000
shares of Common Stock during any calendar year.
ARTICLE IX
ADJUSTMENTS
9.1. In the event that at any time the Company shall enter into a
transaction described in Section 425(a) of the Code, declare a stock dividend,
stock split or otherwise enter into a transaction which in the sole judgment of
the Committee requires action to adjust the terms of outstanding Options, the
Committee may take such action to preserve the Optionee's rights substantially
proportionate to the rights existing prior to such event. To the extent that
such action shall include an increase or decrease in the number of outstanding
shares of Common Stock, the number of shares available under this Plan shall be
proportionately increased or decreased. Any adjustment may provide for the
elimination of any fractional share which might otherwise become subject to an
Option. In the event of a Change of Control, notwithstanding any other provision
of the Plan or set forth in an Option Agreement, including without limitation
any installment provisions in such Option Agreement, the right of an Optionee to
exercise his or her Option shall be accelerated to a right to exercise the
Option in full, or with respect to any portion thereof in the sole discretion of
the Optionee, beginning with the date immediately prior to the Change of Control
and ending with the termination date that otherwise would be applicable under
the terms of the Option if there had not been any Change of Control, and in any
event without regard to any installment provisions under the terms of the
Option.
9.2. For purposes of Article IX, a "Change of Control" shall be deemed to
have occurred if:
(i) any Person, which shall mean a "person" as such term is used in
Sections 13(d) and 24(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") (other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the Company,
or any company owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock
of the Company), is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing 30% or more of the combined voting power of the
Company's then outstanding voting securities; or
(ii) during any period of twenty-four (24) consecutive months,
individuals who at the beginning of such period constitute the Board, and
any new director whose election by the Board, or whose nomination for
election by the Company's stockholders, was approved by a vote of at least
two-thirds (2/3) of the directors (other than in connection with a
contested election) before the beginning of the period cease, for any
reason, to constitute at least a majority thereof; or
(iii) the stockholders of the Company approve (a) a plan of complete
liquidation of the Company or (b) the sale or disposition by the Company of
all or substantially all of the Company's assets unless the acquirer of the
assets or its directors shall meet the conditions for a merger or
consolidation in subparagraphs (iv)(a) or (iv)(b); or
(iv) the stockholders of the Company approve a merger or consolidation
of the Company with any other company other than (a) such a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 70% of the combined voting power of the
Company's or such surviving entity's outstanding voting securities
immediately after such merger or consolidation or (b) such a merger or
consolidation which would result in the directors of the Company who were
directors immediately prior thereto continuing to constitute more than 50%
of the directors of the surviving entity immediately after such merger or
consolidation. For purposes of this subparagraph (iv), the term "surviving
entity" shall mean only an entity in which all of the Company's
stockholders immediately before such merger or consolidation become
stockholders by
A-5
<PAGE> 25
/X/ PLEASE MARK
VOTE AS IN
THIS EXAMPLE.
<TABLE>
<S> <C> <C> <C> <C> <C>
1. Election of Class I directors
FOR AGAINST ABSTAIN
Nominees: Gale S. Fitzgerald, Paul W. Joy and 2. Proposal to amend the / / / / / /
Randolph A. Marks Company's 1991 Employee
Stock Option Plan to increase
the number of shares available
FOR WITHHELD under the Plan by 500,000
ALL / / FROM ALL / / including a provision for a
NOMINEES NOMINEES one-time grant of 5,000
stock options to new outside
members of the Board of
/ / ___________________________________________ Directors.
For all nominees except as noted above
3. Said proxies are given discretionary authority to
vote and act upon such other matters as may come
before the meeting or any adjournment thereof.
MARK HERE MARK HERE
FOR ADDRESS IF YOU PLAN
CHANGE AND / / TO ATTEND / /
NOTE AT LEFT THE MEETING
Please sign, date and return this proxy today. No postage is
required. A business reply envelope is enclosed for your
convenience.
Please date and sign exactly as same appears hereon. Each
joint tenant must sign. When signing as attorney, executor, Signature: _______________________________ Date _____________
trustee, etc., give full title. If signer is a corporation,
sign in full corporate name by authorized officer. If a Signature: _______________________________ Date _____________
partnership, sign in partnership name by an authorized
person.
</TABLE>
<PAGE> 26
COMPUTER TASK GROUP, INCORPORATED
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P The undersigned hereby appoints G. David Baer, George B. Beitzel,
and Richard L. Crandall and each of them, as proxy or proxies, with
R power of substitution to vote all of the shares of Common Stock of
of Computer Task Group, Incorporated (the "Company") which the
O undersigned may be entitled to vote at the Annual Meeting of
Shareholders of the Company to be held at the Company's Headquarters,
X 800 Delaware Avenue, Buffalo, New York on Wednesday, April 26, 1995
at 10:00 a.m. or at any adjournment thereof.
Y
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2 AND IN ACCORDANCE
WITH THE JUDGMENT OF THE PROXIES ON ANY OTHER MATTERS THAT MAY
PROPERLY COME BEFORE THE MEETING.
SEE REVERSE
(MARK, SIGN AND DATE ON REVERSE SIDE) SIDE
