<PAGE> 1
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 ss.240.14a-11(c) or ss.240.14a-12
LAW COMPANIES GROUP, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required.
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2), or Item
22(a)(2) of Schedule 14A.
[ ] 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
[LAW COMPANIES GROUP, INC. LOGO]
April 3, 1998
Dear Shareholder:
You are cordially invited to attend the 1998 Annual Meeting of
Shareholders of Law Companies Group, Inc., which will be held at The Carter
Center, One Copenhill Avenue, N.E., 453 Freedom Parkway, Atlanta, Georgia 30307
on May 11, 1998, at 4:30 p.m. local time.
At the Annual Meeting, you will be asked to consider and vote upon the
election of seven directors. We strongly urge your favorable vote on the
election of directors in the proxy statement. During the meeting we also will
report on the operations of the Company during the past year. Directors and
officers of the Company, as well as representatives of the Company's independent
accountants, Ernst & Young LLP, will be present to respond to appropriate
questions from shareholders.
Whether or not you plan to attend the Annual Meeting, it is important
to complete the enclosed proxy card and return it in the enclosed postage-paid
envelope as promptly as possible.
If you have any questions about the Proxy Statement or the 1997 Annual
Report, please let us hear from you.
Sincerely yours,
/S/ Bruce C. Coles
Bruce C. Coles
Chairman of the Board,
Chief Executive Officer and President
<PAGE> 3
LAW COMPANIES GROUP, INC.
114 Townpark Drive
Kennesaw, Georgia 30144
-----------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 11, 1998
-----------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Law
Companies Group, Inc., a Georgia corporation (the "Company"), will be held at
The Carter Center, One Copenhill Avenue, N.E., 453 Freedom Parkway, Atlanta,
Georgia 30307, on May 11, 1998, at 4:30 p.m., local time for the following
purposes:
(1) To elect seven directors to serve on the Board of Directors of the Company
until the 1999 Annual Meeting or until their successors are duly elected
and qualified; and
(2) To consider and take action upon any other business as may properly come
before the Annual Meeting or any postponements or adjournments thereof. The
Board of Directors is not aware of any other business to be presented to a
vote of the shareholders at the Annual Meeting.
Information relating to the above matters is set forth in the Proxy
Statement accompanying this Notice.
Only holders of record of Common Stock and Preferred Stock as of the close
of business on March 23, 1998 are entitled to notice of, and to vote at, the
Annual Meeting and any postponement or adjournment thereof.
By Order of the Board of Directors,
/S/ Ashley M. Hodges
Ashley M. Hodges
Secretary and General Counsel
Kennesaw, Georgia
April 3, 1998
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND IN PERSON, PLEASE VOTE BY MEANS OF THE
ENCLOSED PROXY CARD THAT YOU ARE REQUESTED TO SIGN, DATE AND RETURN AS SOON AS
POSSIBLE IN THE ENCLOSED ENVELOPE SO THAT WE MAY BE ASSURED OF A QUORUM TO
TRANSACT BUSINESS. IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE
IN PERSON.
<PAGE> 4
LAW COMPANIES GROUP, INC.
114 Townpark Drive
Kennesaw, Georgia 30144
-------------
PROXY STATEMENT FOR THE ANNUAL
MEETING OF SHAREHOLDERS TO BE HELD
ON MAY 11, 1998
-------------
This Proxy Statement and the accompanying proxy card are being
furnished to the shareholders of Law Companies Group, Inc., a Georgia
corporation (the "Company"), in connection with the solicitation of proxies by
the Board of Directors of the Company (the "Board") for use at the Annual
Meeting of Shareholders (the "Annual Meeting") to be held at The Carter Center,
One Copenhill Avenue, N.E., 453 Freedom Parkway, Atlanta, Georgia 30307, on May
11, 1998 at 4:30 p.m., local time or at any postponement or adjournment thereof.
The Proxy Statement and accompanying proxy card are first being mailed or
otherwise distributed to shareholders on or about April 3, 1998.
VOTING
GENERAL
Holders of record of the outstanding shares of the Company's common
stock, par value $1.00 per share (the "Common Stock"), and holders of record of
the outstanding shares of the Company's Cumulative Convertible Redeemable
Preferred Stock, no par value per share (the "Preferred Stock" and together with
the Common Stock, the "Company Stock"), at the close of business on March 23,
1998 (the "Record Date") are entitled to vote, in accordance with the Company's
Restated Articles of Incorporation (the "Articles of Incorporation"), at the
Annual Meeting as set forth in the Articles of Incorporation and described
herein.
VOTE REQUIRED AND QUORUM
The Articles of Incorporation provide that the holders of Common Stock
and the holders of Preferred Stock have unlimited voting rights, except that the
holders of Preferred Stock (a) shall only vote separately as a class with
respect to (i) the election of directors, (ii) on matters as provided in the
Bylaws of the Company, and (iii) as required by applicable law, and (b) shall
not vote on matters expressly reserved for approval solely by another class or
series of stock under the Georgia Business Corporation Code. Under the Articles
of Incorporation, so long as any shares of Preferred Stock remain outstanding,
the holders of Preferred Stock have the right to elect six Directors (the
"Preferred Directors") and the holders of the outstanding Common Stock have the
right to elect six Directors (the "Common Directors"). The holders of Common
Stock also have the right to elect one additional Director (the "Swing
Director") nominated by the Common Directors subject to the approval of the
Preferred Directors, which approval may not be unreasonably withheld. In
accordance with the Articles of Incorporation, the holders of Preferred Stock
elected the six Preferred Directors identified below by unanimous consent in
advance of the Annual Meeting. At the Annual Meeting, the holders of Common
Stock will be asked to vote for the election of the six nominees for Common
Director and for the nominee for Swing Director named below.
The presence, in person or by proxy, of a majority of the outstanding
shares of Common Stock is necessary to constitute a quorum at the Annual Meeting
with respect to the proposal to elect the Common Directors and the Swing
Director. In counting the votes to determine whether a quorum exists with
respect to the election of Common Directors and Swing Director at the Annual
Meeting, all votes "for" and instructions to withhold authority to vote will be
used. The presence, in person or by proxy, of the holders of a majority of the
aggregate voting rights of the Common Stock and the Preferred Stock, treated as
a
<PAGE> 5
single class, is required to constitute a quorum at the Annual Meeting with
respect to any other matter that properly comes to a vote at the Annual Meeting
and which does not require voting by the Common Stock and Preferred Stock as
separate classes. In counting the votes to determine whether a quorum exists
with respect to any other proposals that properly arise at the Annual Meeting,
the proposal receiving the greatest number of all votes "for" or "against" and
abstentions (including instructions to withhold authority to vote) will be used.
Holders of Common Stock on the Record Date should specify their choices
with regard to the election of the Common Directors and the Swing Director on
the enclosed proxy card.
A proxy may be revoked at any time before it is voted by (1) giving
written notice of revocation to the Secretary of the Company, (2) executing and
delivering to the Company at the address shown above a new proxy bearing a later
date, or (3) attending the Annual Meeting and voting in person. All properly
executed proxies, unless previously revoked, will be voted at the Meeting or at
any postponement or adjournment thereof in accordance with the directions given.
With respect to the election of Common Directors and the Swing
Director, holders of Common Stock may vote in favor of all nominees, withhold
their vote as to all the nominees, or withhold their vote as to specific
nominees. The vote required to elect the Common Directors and Swing Director is
a plurality of the votes cast by the holders of shares of Common Stock entitled
to vote, provided a quorum is present. As a result, votes that are withheld will
not be counted and will have no effect. The Board does not intend to present and
knows of no others who intend to present at the Meeting any matter of business
other than the matter set forth in the accompanying Notice of Annual Meeting of
Shareholders. However, should any such other matters (including shareholder
proposals omitted from this proxy statement in accordance with the rules and
regulations of the Securities and Exchange Commission ("SEC")) properly come
before the Annual Meeting, it is the intention of the persons named in the
enclosed proxy to vote the proxy in accordance with their best judgment.
At the Meeting, inspectors of election will determine the presence of a
quorum and tabulate the results of the voting by shareholders. The Company's
shares of Common Stock are owned of record and beneficially primarily by
employees of the Company, its subsidiaries and affiliates. Accordingly, the
Company receives no "broker non-votes."
As of March 23, 1998 (the Record Date for the Annual Meeting), the
Directors and executive officers of the Company owned or controlled
approximately 163,864 shares of Common Stock, constituting approximately 8.7% of
the outstanding Common Stock, and 963,398 shares of Preferred Stock,
constituting 100% of the outstanding Preferred Stock. As a result, on any
matters requiring the approval of the Common Stock and the Preferred Stock
voting as a single class, the Directors and executive officers of the Company
control approximately 39.5% of the Company Stock entitled to vote.
A proxy card is enclosed for your use. YOU ARE SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS TO COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD IN THE
ACCOMPANYING ENVELOPE.
2
<PAGE> 6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information, as of March 23,
1998, regarding the beneficial ownership of Common Stock and Preferred Stock of
each executive officer named in the summary compensation table below (the "Named
Executive Officers"), each director and all directors and executive officers of
the Company as a group. Each person or group has sole voting and investment
power with respect to all shares of the Company Stock so owned, except as
otherwise noted.
<TABLE>
<CAPTION>
Number of Shares
Beneficially Owned(1) Percent of Class
-------------------------- --------------------
Name of Common Preferred Common Preferred
Beneficial Owner Stock Stock Stock Stock
- ---------------- ----- ----- ----- -----
<S> <C> <C> <C> <C>
Bruce C. Coles 24,751(2) 0 1.31% *
Peter D. Brettell 425 0 * *
Robert B. Fooshee 0 0 * *
Robert S. Gnuse 11,049 0 * *
Walter T. Kiser 0 0 * *
Frank B. Lockridge, Jr. 49,873 0 2.66% *
Joe A. Mason 0 0 * *
Thomas D. Moreland 0 0 * *
Steven Muller 1,000 0 * *
Clay E. Sams 85,439 0 4.56% *
Darryl B. Segraves(3) 900 0 * *
W. Allen Walker 5,004 0 * *
James M. Williams, Jr. 1,863,398(4)(5) 481,699(5) 49.66% 50%
John Y. Williams(8) 0 0 * *
Michael D. Williams 0 0 * *
Virgil R. Williams 1,863,398(4)(6) 481,699(6) 49.66% 50%
All executive officers,
directors and director
nominees as a group
(17 persons) 2,043,162 (7) 963,398 54.23% 100%
</TABLE>
- ----------------------
* Less than one percent
(1) The number of shares of Company Stock beneficially owned by the persons
named in the table has been determined in accordance with SEC regulations
and includes shares subject to options or warrants which may be exercised,
and shares of Common Stock issuable upon conversion of Preferred Stock, in
each case within 60 days of March 23, 1998.
(2) The shares shown include 15,000 shares that Mr. Coles may acquire upon
exercise of options to purchase Common Stock.
(3) Mr. Segraves resigned from the Company as of February 7, 1998.
(4) The shares shown include (i) 481,699 shares of Common Stock that each of
the James M. Williams, Jr. Family Partnership, L.P. (the "Partnership") and
Virgil R. Williams may acquire upon conversion of Preferred Stock, (ii) an
aggregate of 963,398 shares issuable to the Partnership and Virgil R.
Williams upon exercise of Correlating Warrants (as hereinafter defined)
owned jointly by the Partnership and Virgil R. Williams, and (iii) an
aggregate of 900,000 shares that the Partnership and Virgil R. Williams may
acquire upon the exercise of the Options (as hereinafter defined) owned
jointly by the Partnership and Virgil R. Williams. The number of shares of
Common Stock issuable upon conversion of Preferred Stock will be reduced by
an amount equal to the number of shares of Common Stock actually issued
upon exercise of Correlating Warrants. Likewise, the number of shares
issuable upon exercise of Correlating Warrants will be reduced by an amount
equal to the number of shares of
3
<PAGE> 7
Common Stock actually issued upon conversion of Preferred Stock. See
"Certain Relationships and Related Party Transactions."
(5) The shares shown are owned by the Partnership. James M. Williams, Jr. is a
general partner of the Partnership. Mr. Williams, by reason of his majority
interest in the Partnership, controls the right to vote the shares and
derivative securities and to engage in any action with respect to the
shares and derivative securities. The address of Mr. Williams and the
Partnership is 1300 Highway 84, Grayson, Georgia 30017.
(6) Mr. Virgil R. Williams' address is 2055 Webb Gin House Road, Snellville,
Georgia 30278.
(7) Includes 15,000 shares that may be acquired upon exercise of options to
purchase Common Stock, 963,398 shares issuable upon conversion of Preferred
Stock and/or exercise of Correlating Warrants, and 900,000 shares issuable
upon exercise of Options.
(8) John Y. Williams is of no relation with either James M. Williams, Jr.,
Virgil R. Williams or Michael D. Williams.
PRINCIPAL SHAREHOLDERS
The following table sets forth information, as of March 23, 1998,
regarding the ownership of Common Stock and Preferred Stock by each person know
to the Company to be the beneficial owner of more than 5% of the Company's
Common Stock or Preferred Stock.
<TABLE>
<CAPTION>
Number of Shares
Beneficially Owned(1) Percent of Class
-------------------------- ---------------------
Name of Common Preferred Common Preferred
Beneficial Owner Stock Stock Stock Stock
- ---------------- ----- ----- ----- -----
<S> <C> <C> <C> <C>
James M. Williams, Jr. 1,863,398(2)(3) 481,699(3) 49.66% 50%
Virgil R. Williams 1,863,398(2) 481,699 49.66% 50%
James M. Williams, Jr.
Family Partnership, LP 1,863,398(2)(3) 481,699(3) 49.66% 50%
</TABLE>
- ----------------------
(1) The number of shares of Company Stock beneficially owned by the persons
named in the table has been determined in accordance with SEC regulations
and includes shares subject to options or warrants which may be exercised,
and shares of Common Stock issuable upon conversion of Preferred Stock, in
each case within 60 days of March 23, 1998.
(2) The shares shown include (i) 481,699 shares of Common Stock that each of
the Partnership and Virgil R. Williams may acquire upon conversion of
Preferred Stock, (ii) an aggregate of 963,398 shares issuable to the
Partnership and Virgil R. Williams upon exercise of Correlating Warrants
(as hereinafter defined) owned jointly by the Partnership and Virgil R.
Williams, and (iii) an aggregate of 900,000 shares that the Partnership and
Virgil R. Williams may acquire upon the exercise of the Options (as
hereinafter defined) owned jointly by the Partnership and Virgil R.
Williams. The number of shares of Common Stock issuable upon conversion of
Preferred Stock will be reduced by an amount equal to the number of shares
of Common Stock actually issued upon exercise of Correlating Warrants.
Likewise, the number of shares issuable upon exercise of Correlating
Warrants will be reduced by an amount equal to the number of shares of
Common Stock actually issued upon conversion of Preferred Stock. See
"Certain Relationships and Related Party Transactions."
(3) The shares shown are owned by the Partnership. James M. Williams, Jr. is a
general partner of the Partnership. Mr. Williams, by reason of his majority
interest in the Partnership, controls the right to vote the shares and
derivative securities and to engage in any action with respect to the
shares and derivative securities.
4
<PAGE> 8
ELECTION OF DIRECTORS
GENERAL
Pursuant to the Articles of Incorporation and Bylaws of the Company,
the Board of Directors consists of thirteen directors. So long as any shares of
Preferred Stock remain outstanding, the holders of Preferred Stock have the
right to elect six Preferred Directors and the holders of the outstanding Common
Stock have the right to elect six Common Directors and one Swing Director. The
Swing Director is nominated by the Common Directors subject to the approval of
the Preferred Directors, which approval may not be unreasonably withheld. In
accordance with the Articles of Incorporation, the holders of Preferred Stock
elected the six Preferred Directors identified below by unanimous consent in
advance of the Annual Meeting. At the Annual Meeting, the holders of Common
Stock will be asked to vote for the election of the six nominees for Common
Director and for the nominee for Swing Director named below.
Each of the nominees has consented to serve as a director, if elected.
Directors hold office until the next Annual Meeting of Shareholders. It is not
contemplated that any of the nominees will be unable or unwilling to serve as a
Director; however, if that should occur, the Common Directors of the Board of
Directors may designate a substitute nominee or nominees (in which event the
persons named on the enclosed proxy card will vote the shares represented by all
valid proxy cards for the election of such substitute nominee or nominees) or
allow the vacancies to remain open until a suitable candidate or candidates are
located.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE HOLDERS OF
COMMON STOCK VOTE "FOR" THE PROPOSAL TO ELECT BRUCE C. COLES, PETER D. BRETTELL,
ROBERT B. FOOSHEE, WALTER T. KISER, FRANK B. LOCKRIDGE, CLAY E. SAMS AND JOHN Y.
WILLIAMS AS DIRECTORS FOR A ONE YEAR TERM EXPIRING AT THE 1999 ANNUAL MEETING OF
SHAREHOLDERS AND UNTIL THEIR SUCCESSORS HAVE BEEN DULY ELECTED AND QUALIFIED.
BACKGROUND OF COMMON DIRECTOR AND SWING DIRECTOR - NOMINEES
The following sets forth certain information as of March 23, 1998, with
respect to the nominees for the Common Directors and Swing Director.
BRUCE C. COLES, 53, joined the Company in September 1995 as Chairman of the
Board of Directors and Chief Executive Officer of the Company. In 1996, Mr.
Coles was elected President of the Company. He serves in a similar capacity with
various subsidiaries of the Company, including Law Engineering and Environmental
Services, Inc. and Gibb International Holdings, Inc. Mr. Coles currently serves
as a director of Williams Group International, Inc. which is owned by Virgil R.
Williams and James M. Williams, Jr.
From May 1994 through August 1995, Mr. Coles was President, Chief Executive
Officer and/or Chairman of Stone & Webster Incorporated, an international
engineering, consulting and construction services company. Prior to August 1995,
Mr. Coles held various technical and management positions with Stone & Webster
Incorporated and its related affiliates since June 1968. Mr. Coles also serves
on the National Board of Directors of Junior Achievement, the Board of
Councilors of The Carter Center, the Board of the Civil Engineering Research
Foundation, the advisory council for the Accreditation Board for Engineering and
Technology and the Civil Engineering Association of the University of Maine.
PETER D. BRETTELL, 45, joined Gibb Ltd., a subsidiary of the Company, in 1975
and has served in various engineering and management positions. Mr. Brettell
serves as Chief Executive of Gibb Ltd. Since 1996, Mr. Brettell has been a
Director of the Company.
ROBERT B. FOOSHEE, 55, joined the Company in January 1996 as Executive Vice
President and Chief Financial Officer. Mr. Fooshee also serves as Treasurer of
the Company. Mr. Fooshee has been a Director
5
<PAGE> 9
of the Company since 1996. Prior to joining the Company, Mr. Fooshee provided
consulting services for RBF & Associates, a financial consulting company, from
February 1995 until joining the Company. From August 1994 through January 1995,
Mr. Fooshee was Executive Vice President and Chief Financial Officer for Eddie
Haggar Limited, an apparel manufacturing and marketing company. From June 1992
until August 1994, Mr. Fooshee was Chief Financial Officer for The Fresh Market,
a retail gourmet grocery company. From April 1986 until June 1992, Mr. Fooshee
was Chief Financial Officer for Kayser-Roth Corporation, a consumer products
company.
WALTER T. KISER, 61, joined the Company in 1962 and held various engineering and
management positions with the Company, including Chairman and Chief Executive
Officer of Law Companies Engineering Group, Inc., a subsidiary of the Company,
from 1991 until his retirement in 1993. He served as Chairman and Chief
Executive Officer of Law Engineering, Inc., a subsidiary of the Company, from
1989 until 1991, and served as President of the Company from March 1985 until
December 1988. Additionally, from 1977 to 1993 Mr. Kiser served as a Director of
the Company. Mr. Kiser returned as a Director in 1995 and continues to serve in
that capacity. Mr. Kiser also serves as a director of Atlantech International
and EvCo Research.
FRANK B. LOCKRIDGE, 58, joined the Company in 1965 and has held various
technical and management positions with the Company and its subsidiaries. Mr.
Lockridge has served as a Senior Vice President of Law Engineering and
Environmental Services, Inc., a subsidiary of the Company, since 1997. Mr.
Lockridge was elected as a Director in February 1997.
CLAY E. SAMS, 56, joined the Company in 1964. Since December 1979, he has served
as Vice President of Law Engineering and Environmental Services, Inc. and its
predecessors, and Corporate Geotechnical Consultant of the various subsidiaries
of the Company. Prior thereto, he served in various engineering and management
positions with the Company. Mr. Sams has been a Director of the Company since
1993.
JOHN Y. WILLIAMS, 54, has served as a Director of the Company since 1995 and has
been nominated as the Swing Director. Mr. Williams has been a Managing Director
of Equity South Partners, L.P., a merchant banking partnership, since January
1995 and of its affiliate Grubb & Williams, Ltd. since 1987. Mr. Williams also
serves as a director of Tech Data Corporation.
BACKGROUND OF PREFERRED DIRECTORS
The following sets forth certain information as of March 23, 1998
regarding the Preferred Directors. In accordance with the Articles of
Incorporation, each of the Preferred Directors was nominated by the Preferred
Directors and elected as a Director by unanimous consent of the holders of
Preferred Stock and will serve as a Director until the next Annual Meeting of
Shareholders (or unanimous consent in lieu thereof) and until his successor is
elected and qualified.
JOE A. MASON, 48, has been a Director of the Company since May 1997. Since April
1997, Mr. Mason has been employed by Messrs. Virgil R. Williams and James M.
Williams, Jr. to provide financial oversight of their various interests. Mr.
Mason is a certified public accountant. He served as a manager of the accounting
firm of Smith & Radigan, Atlanta, Georgia from 1994 to April 1997. From 1988
through 1994, Mr. Mason served as President and controlling shareholder of Bank
Consultants, Inc., a management consulting company serving the banking industry.
THOMAS D. MORELAND, 64, serves as President and Chief Executive Officer of
Moreland Altobelli Associates, Inc., a civil engineering firm owned by Mr.
Moreland with Virgil R. Williams, James M. Williams, Jr., and Stephen Moreland.
He has held this position for more than five years. Prior to such time, he was
the Chief Operating Officer of Williams Service Group, Inc., a division of
Williams Group International, Inc. He has served as Director of the Company
since May 1997.
6
<PAGE> 10
STEVEN MULLER, 70, has served as a Director of the Company since March 1991. Dr.
Muller is President Emeritus of The Johns Hopkins University where he served as
President from 1972 to 1990. Dr. Muller is also a director of VKAC Closed End
Funds; Beneficial Corporation; and Organization Resources Counselors, Inc.
JAMES M. WILLIAMS, JR., 65, has served as Vice Chairman of the Board of Williams
Group International, Inc. and its predecessors for more than the past five
years, and as Director of the Company since May 1997. Mr. Williams, Jr. is a
graduate of the Georgia Institute of Technology, holding a degree in Chemical
Engineering. He, together with Virgil R. Williams, his brother, controls a
variety of communications, industrial, environmental and engineering firms. Mr.
Williams, Jr. is the uncle of Michael D. Williams.
MICHAEL D. WILLIAMS, 33, is owner and President of Georgia Tractors, Inc., an
agricultural and industrial equipment dealership company. He has served as Vice
President and a director of Williams Group International, Inc. since 1985, and
is also a director of First Newton Bank, Covington, Georgia. Mr. Williams is the
son of Virgil R. Williams and a nephew of James M. Williams, Jr. He has been a
Director of the Company since May 1997.
VIRGIL R. WILLIAMS, 58, has served as Chairman of the Board, President and Chief
Executive Officer of Williams Group International, Inc., a construction,
facilities maintenance and environmental engineering firm, and its predecessors
for more than the past five years. He has served as a Director of the Company
since May 1997. Mr. Williams is a graduate of the Georgia Institute of
Technology and holds a degree in Industrial Engineering. He, together with James
M. Williams, controls a variety of communications, industrial, environmental and
engineering firms, and he currently serves on the Board of Directors of
NationsBank, the Georgia Chamber of Commerce and as a trustee for Young Harris
College, the Georgia Research Alliance, the Georgia Conservancy, and the Georgia
Tech Foundation. Mr. Williams is the brother of James M. Williams, Jr. and the
father of Michael D. Williams.
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors of Law Companies Group, Inc. met eight (8) times during
1997. All members of the Board of Directors attended at least 75 percent of the
meetings of the Board and the various committees of the Board of which they are
members.
FINANCE & AUDIT COMMITTEE: Current members are Messrs. John Y. Williams
(Chairman), Brettell, Mason, Kiser, Sams, James M. Williams, Jr., and Coles (ex
officio). The Finance and Audit Committee met three (3) times during 1997. The
Committee monitors the financial plans and performance of the Company, meets
with the outside auditors and reviews the scope of audit activities and the
recommendations of the auditors; and reviews other matters related to accounting
and auditing.
COMPENSATION COMMITTEE: Current members are Messrs. Muller (Chairman), Fooshee,
John Y. Williams, Virgil R. Williams and Coles (ex officio). The Compensation
Committee met five (5) times during 1997. The Committee generally administers
matters relating to executive compensation. This includes recommendation of
salary levels. The Committee makes recommendations concerning approval of the
variable compensation plan and administration thereof.
NOMINATING COMMITTEE: Current members are Messrs. John Y. Williams (Chairman),
Muller, Coles, Sams and Brettell. There was one meeting during 1997. The Company
only considers nominees to the Board by shareholders that are submitted to the
Nominating Committee.
7
<PAGE> 11
COMPENSATION OF DIRECTORS
The Company pays its non-employee Directors $3,000 per quarter for
their services, $2,000 for each Board of Directors meeting attended and $1,000
for each Board Committee meeting attended. Committee chairmen receive an
additional $1,500 per meeting chaired. The Company also reimburses all of its
Directors for reasonable expenses incurred in connection with attending Board of
Directors and Board Committee meetings.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding
compensation paid during each of the Company's last three fiscal years to the
Company's Chief Executive Officer and each of the four other most highly
compensated persons who served as executive officers during 1997.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------- ----------------------
Awards
------
Restricted Options All Other
Name & Principal Position Year Salary Bonus Stock Awards Granted Compensation(1)
- ------------------------- ---- ------ ----- ------------ ------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Bruce Coles 1997 $550,014 $159,388 $ 58,325(2)
Chairman of the Board, 1996 550,014 75,000(3) $ 65,029(2)
Chief Executive 1995 171,350(4) $120,000 $200,000(5) 50,000 $ 49,117
Officer and
President
Robert Fooshee 1997 $210,018 $ 45,645 30,000(3) $ 10,055(7)
Executive Vice President, 1996 195,417(6) 20,000 $ 50,692(7)
Chief Financial Officer, 1995 n/a
Treasurer, and Director
Darryl Segraves(8) 1997 $174,990 $ 31,694 20,000(3) $ 7,499
General Counsel, Secretary, 1996 165,009 2,500 $ 9,071
and Executive Vice 1995 150,009
President
William Allen Walker 1997 $161,990 $ 29,340 20,000(3) $ 8,851(9)
Executive Vice President 1996 150,010 2,500 $ 7,219(9)
1995 121,800 $ 5,508(9)
Robert S. Gnuse 1997 $140,005 $ 14,301 10,000(3) $ 8,549(10)
Senior Vice President 1996 125,008 1,500 $ 7,320(10)
1995 119,995 $ 6,464(10)
</TABLE>
- -------------------------------
(1) This column includes auto allowance, life insurance premiums, and club
dues.
(2) The amounts represented also include the Company's matching contributions
to the Law Companies Group, Inc. 401(k) Savings Plan (the "401(k) Plan")
of $3,200 in 1997 and $2,250 in 1996, and the Company's contributions to
the Supplemental Executive Retirement Plan in the amount of $46,655 in
1997 and $43,603 in 1996.
(3) The options were granted in connection with the cancellation of the named
executive's previously owned options. (See, "Report on Repricing of
Options").
(4) The salary amount for Mr. Coles represents only a partial year's salary
since Mr. Coles joined the Company in September 1995.
(5) Represents 9,751 shares of restricted stock granted at fair market value
of $20.51 per share. The restrictions lapsed on January 10, 1997 and
January 10, 1998.
(6) Salary amount for Mr. Fooshee represents a partial year's salary since Mr.
Fooshee joined the Company in early 1996.
(7) The amounts represented also include the Company's matching contributions
to the 401(k) Plan in the amount of $3,200 in 1997 and $1,731 in 1996, and
relocation expenses in 1996.
(8) Darryl B. Segraves resigned from the Company effective February 7, 1998.
8
<PAGE> 12
(9) The amounts represented also include the Company's matching contributions
to the 401(k) Plan in the amount of $3,108 in 1997, $1,904 in 1996, and
$1,178 in 1995.
(10) The amounts represented also include the Company's matching contributions
to the 401(k) Plan in the amount of $2,684 in 1997, $2,524 in 1996, and
$1,161 in 1995.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
The Company entered into employment agreements with each of Messrs.
Coles, Fooshee, Segraves and Walker effective May 6, 1997. In the case of
Messrs. Coles and Fooshee the new employment agreements, upon their execution,
extinguished entirely their previously existing employment agreements. The new
employment agreements provide for initial base salaries at the rates in effect
at the time of signing, and salaries will be subject to annual upward adjustment
(but not decreased) in the discretion of the Chairman of the Board and
Compensation Committee.
The employment agreements also provide that if Messrs. Coles, Fooshee,
Segraves, and Walker are terminated "without cause" (a) within two years from
May 6, 1997, they will be entitled to receive two years of compensation plus
benefits or (b) after two years from May 6, 1997, they will be entitled to
receive one year of compensation plus benefits. However, if such termination
follows a "Change of Control" of the Company to an entity other than the
Investors, as defined below, or another entity who is not a permitted transferee
thereunder, then each of the executives will be entitled to receive up to two
years at their current compensation levels regardless of whether termination
occurs within two years of May 6, 1997. A "Change of Control" means any
individual or entity or related groups of entities or individuals who obtains
(i) the beneficial ownership or power to vote more than fifty (50%) percent of
the outstanding securities of the Company; or (ii) the right to elect a majority
of the Board.
OPTION GRANTS
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realized Value At
Number Of % Of Total Assumed Annual Rates
Securities Options Of Stock Price Appreciation
Underlying Granted To Exercise For Option Term
Options Employees Price Per ---------------------------
Name Granted(1) In 1997 Share Expiration Date 5% 10%
- ---- ---------- ------- ----- --------------- -- ---
<S> <C> <C> <C> <C> <C> <C>
W. Allen Walker 20,000 8.77% $12.61 May 6, 2007 $158,607 $401,942
Darryl B. Segraves 20,000 8.77% $12.61 May 6, 2007 $158,607 $401,942
Robert B. Fooshee 30,000 13.16% $12.61 May 6, 2007 $237,911 $602,913
Robert S. Gnuse 10,000 4.39% $12.61 May 6, 2007 $ 79,304 $200,971
</TABLE>
(1) The options granted in 1997 vest 20% on the first anniversary of the date
of grant, 20% on the second anniversary of the date of grant, 20% on the
third anniversary of the date of grant, 20% on the fourth anniversary of
the date of grant, and 20% on the fifth anniversary of the date of grant.
The Company did not grant any stock appreciation rights during 1997.
OPTIONS EXERCISED DURING 1997 AND YEAR END OPTION VALUES
As indicated in the table below, the Named Executive Officers did not
exercise any options during the fiscal year ended December 31, 1997. The table
also sets forth (i) the number of shares covered by unexercised options (both
exercisable and unexercisable) as of December 31, 1997, and (ii) the respective
values of "in-the-money" options, which represents the positive spread between
the exercise price of existing options and the fair market value of the
Company's Common Stock at December 31, 1997.
9
<PAGE> 13
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at December 31, In-the-Money Options at
1997 (#) December 31, 1997 ($)
Shares
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable(1)
- ---- ------------ ------------ ------------- ----------------
<S> <C> <C> <C> <C>
Bruce C. Coles 0 0 15,000/60,000 $47,700/$190,800
Robert B. Fooshee 0 0 0/30,000 $0/$66,300
Darryl B. Segraves 0 0 0/20,000 $0/$44,200
W. Allen Walker 0 0 0/20,000 $0/$44,200
Robert S. Gnuse 0 0 0/10,000 $0/$22,100
</TABLE>
(1) There is currently no established trading market for shares of the
Company's Common Stock. The information regarding the market price of the
stock is based on two independent appraisals as of December 31, 1997. These
appraisals were conducted in accordance with the terms of the Company's
401(k) Plan. No assurances can be given that the appraisals reflect the
actual price at which the Common Stock has traded or would have traded had
there been a market for the Common Stock.
REPORT OF THE COMPENSATION COMMITTEE ON REPRICING OF OPTIONS
In May 1997, the Compensation Committee of the Board of Directors
approved a stock option repricing program to provide certain employee option
holders additional opportunity and incentive to achieve business plan goals. All
options held by these certain employees on that date were cancelled and new
options granted at an exercise price of $12.61 per share, which was the
appraised value of the stock conducted pursuant to the terms of the Company's
401(k) Plan on the date of grant.
COMPENSATION COMMITTEE:
Steven Muller, Chairman
Bruce C. Coles (ex officio)
Robert B. Fooshee
John Y. Williams
Virgil R. Williams
10
<PAGE> 14
REPORT ON REPRICING OF OPTIONS
The table below provides information with respect to such repricing as well as
any other incidents of repricing in the past ten fiscal years.
<TABLE>
<CAPTION>
Length of
Number of Original
Securities Market Price Exercise Option Term
Underlying of Stock at Price at Remaining at
Options Time of Time of New Date of
Repriced or Repricing or Repricing or Exercise Repricing or
Name Date Amended (#) Amendment(1) Amendment Price Amendment
- ---- ---- ----------- ------------ ------------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Bruce C. Coles 12/20/96 50,000 $11.64 $20.51 $11.64 8 yrs, 11 mos
Robert B. Fooshee 05/06/97 20,000 $12.61 $16.91 $12.61 8 yrs, 9 mos
Darryl B. Segraves 05/06/97 2,000 $12.61 $26.36 $12.61 6 yrs, 4 mos
05/06/97 2,500 $12.61 $16.91 $12.61 8 yrs, 9 mos
W. Allen Walker 05/06/97 2,500 $12.61 $17.80 $12.61 4 yrs, 8 mos
05/06/97 2,000 $12.61 $26.36 $12.61 6 yrs, 4 mos
05/06/97 2,500 $12.61 $16.91 $12.61 8 yrs, 9 mos
Robert S. Gnuse 05/06/97 4,250 $12.61 $17.80 $12.61 4 yrs, 8 mos
05/06/97 1,500 $12.61 $16.91 $12.61 8 yrs, 9 mos
</TABLE>
(1) There is currently no established trading market for shares of the
Company's Common Stock. The information regarding the market price of the
stock is based on two independent appraisals as of December 31, 1997. These
appraisals were conducted in accordance with the terms of the Company's
401(k) Plan. No assurances can be given that the appraisals reflect the
actual price at which the Common Stock has traded or would have traded had
there been a market for the Common Stock.
PENSION AND RETIREMENT BENEFITS
Retirement Pension Plan. The Law Companies Group, Inc. Pension Plan
(the "Retirement Pension Plan") is intended to be a tax-qualified defined
benefit pension plan. The Retirement Pension Plan covers certain employees of
the Company and participating affiliated companies who attain age 21 and who
complete 1,000 hours of service during twelve consecutive months of employment
with the Company and/or participating subsidiaries prior to the freeze date (as
defined below). Employees who are leased employees, who are represented by a
collective bargaining agent or who are nonresident aliens with no U.S. income
are not covered by the Retirement Pension Plan.
Benefits under the Retirement Pension Plan are based upon length of
service with the Company and participating affiliated companies, with benefit
provisions that vary dependent on when the participant terminates employment
with the Company or participating affiliated companies, or whether the employee
takes early, normal or deferred retirement. A participant's benefits are also
based on the participant's earnings for the three consecutive years of highest
compensation during his or her final 120 months of employment with the Company
and/or participating affiliated companies. The compensation that is taken into
account in determining the participant's highest average compensation is the
participant's annualized basic rate of pay including statutorily required
overtime, but not including bonuses, commissions, or other nonrecurring
compensation such as project pay, overseas pay or other premium pay.
The amount of a participant's compensation taken into account for
Retirement Pension Plan benefit purposes is limited by the Internal Revenue Code
to an indexed amount ($160,000 in 1997). Benefits under the Retirement Pension
Plan are "integrated" with (and therefore take into account) Social Security.
11
<PAGE> 15
A participant's benefit under the Retirement Pension Plan will
generally become vested upon the completion of five years of service with the
Company and/or participating affiliated companies.
The Retirement Pension Plan was "frozen" effective March 28, 1997 (the
"Freeze Date"). No further employees will become eligible to participate in the
Retirement Pension Plan after the Freeze Date, and no further benefits will
accrue after the Freeze Date under the Retirement Pension Plan for any
participant. Service after the Freeze Date will be taken into account for
vesting purposes only, and compensation after the Freeze Date will not be taken
into account.
The Named Executive Officers of the Company had accrued the following
estimated annual retirement benefits under the Retirement Pension Plan as of the
Freeze Date: Bruce C. Coles--$4,842; W. Allen Walker--$16,272; Darryl B.
Segraves--$18,753; Robert B. Fooshee--$3,861; Robert S. Gnuse --$35,807. No
further benefits will accrue under the Retirement Pension Plan for any of the
Named Executive Officers after the Freeze Date. The annual retirement benefit
given for each Named Executive Officer is based on his retirement at age 65 and
election of payment of benefits in the form of a straight life annuity.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following employee directors served on the Compensation Committee:
Messrs. Brice, Fooshee, and Coles (ex officio) during 1997. Messrs. Muller and
John Y. Williams served as non-employee directors on the Compensation Committee
during 1997. Mr. Brice resigned from the Board as of May 6, 1997 and Mr. Virgil
R. Williams was elected to the Committee. Mr. Coles currently serves as a
director of Williams Group International, Inc. which is owned by Virgil R.
Williams and James M. Williams, Jr. To the Company's knowledge, there were no
other interrelationships involving members of the Compensation Committee or
other Directors requiring disclosure in this proxy statement.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Since May 1997, the Compensation Committee of the Board was comprised
of three non-employee Directors and two employee Directors of the Company. This
committee administers the executive officer compensation program. The outside
Directors of the Compensation Committee determine executive compensation awards
and make recommendations regarding executive officer salaries to the Board.
The Company's primary objective is to maximize, over the long-term, the
investments of shareholders. The Company has developed a compensation strategy
which will support the achievement of this. Key components of the executive
compensation strategy are as follows:
MARKET COMPETITIVE--The Company's executive officer compensation program is
competitive with those organizations with which the Company competes for
executive talent. The market, consisting primarily of ten engineering consulting
firms, is monitored closely by the Company to assure that the Company has a
program in place to attract and retain superior executive talent. The Company's
intent is for compensation to be targeted at the median of this group; however,
specific facts and circumstances may cause deviations from the median.
Competitive market data and general compensation advice is provided to the
Committee by an independent compensation consultant.
LONG-TERM--The program is structured to deliver competitive pay over a number of
years rather than to focus on any single year. Superior pay is provided when the
Company's earnings performance exceeds expectations.
AT-RISK--A more significant portion of the compensation provided executive
officers will be based on Company performance.
12
<PAGE> 16
EQUITY-BASED--Executive officers are encouraged to own a substantial amount of
stock and will be provided opportunities to acquire additional shares through
stock option grants and other stock purchase opportunities. Stock option grants
will provide value to executives only if stock price appreciation is achieved
for all shareholders. Equity related pay is intended to be a significant portion
of the executives' overall pay program. Equity opportunities are based on
relative potential contribution, accountability and responsibility of the
various executive positions.
The Compensation Committee believes the compensation provided to the Company's
executive officers effectively rewards them based heavily on the performance of
the overall Company by emphasizing compensation features tied to Company
performance and long-term equity incentives. The Committee believes this
approach links executive compensation to the performance of the Company over the
long term.
CHIEF EXECUTIVE OFFICER
During fiscal 1997, Mr. Coles received a base salary of $550,014
pursuant to the terms of his employment agreement.
SALARY
The following executive officers received increases to their salaries
during fiscal year 1997: Robert B. Fooshee, Darryl B. Segraves, W. Allen Walker,
and Robert S. Gnuse.
MANAGEMENT INCENTIVE PLAN
The Management Incentive Plan ("MIP") is an annual incentive
compensation plan pursuant to which the Company's executive officers and other
senior managers may earn cash rewards to supplement their base compensation. The
MIP has been designed to motivate and reward the achievement of quantitative
business results by linking a significant portion of total pay to corporate and
individual success. In addition, management and the Compensation Committee
believe the MIP enhances the Company's ability to attract and retain qualified
executive management talent.
Awards under the MIP are earned by achievement of defined levels of
corporate profits. Corporate profits are defined as consolidated earnings before
interest, taxes, depreciation and amortization ("EBITDA") less capital expenses
and including any other adjustments. A portion of each participant's MIP award
is also tied to the achievement of specific business unit, regional, or
individual objectives which further the Company's annual business strategy.
Under the MIP, a threshold, or minimum, level of EBITDA performance
must be achieved before any incentive is funded for any MIP participants. This
threshold ensures that certain acceptable levels of profitability are achieved
before any management incentives are paid, thereby protecting shareholder
interests. The Company exceeded certain minimum goals set forth under the MIP.
As a result, the Named Executives earned an award under the MIP, payable in
1998, as follows: Bruce C. Coles--$159,388, Robert B. Fooshee--$45,645, Darryl
B. Segraves--$31,694, W. Allen Walker--$29,340 and Robert S. Gnuse--$14,301.
INTERNAL REVENUE CODE SECTION 162(M)
The Committee has considered Internal Revenue Code Section 162(m) in
structuring compensation arrangements for 1997. Section 162(m) places a
$1,000,000 limit on deductibility available to the Company for an executive's
compensation. This limit was not reached in 1997, and the Company believes that
all compensation paid to named executives is fully tax deductible by the
Company.
13
<PAGE> 17
This report has been submitted on behalf of the Compensation Committee.
The Compensation Committee consisted of the following members:
Steven Muller, Chairman
Bruce C. Coles (ex officio)
Robert B. Fooshee
John Y. Williams
Virgil Williams
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
On May 6, 1997, the shareholders of the Company authorized and approved
a transaction between the Company and Virgil R. Williams and James M. Williams,
Jr., each a director of the Company (collectively, the "Investors") pursuant to
which the Company sold to the Investors:
(a) An aggregate of 963,398 shares of Preferred Stock together
with correlating warrants to purchase the same number of
shares of Common Stock (the "Correlating Warrants");
(b) Options to purchase an aggregate of up to 900,000 shares of
Common Stock, which number declines to 200,000 shares over
time (the "Options"); and
(c) Additional options to purchase shares of Common Stock
exercisable when and if certain incentive stock options are
exercised (the "Plan Options").
In consideration, the Investors paid to the Company an aggregate of
$10,000,000.
Each share of Preferred Stock is convertible, at the option of the
holder, into one share of Common Stock until May 6, 2004, when each share of
Preferred Stock becomes convertible into an "Adjusted Number" of shares of
Common Stock (determined pursuant to the terms of the Company's Articles of
Incorporation). Notwithstanding the foregoing, upon exercise of Correlating
Warrants, the Investors forfeit the right to convert a number of shares of
Preferred Stock equal to the number of shares of Common Stock issued upon
exercise of the Correlating Warrants. Further, upon conversion of shares of
Preferred Stock, an equal number of Correlating Warrants shall be canceled.
The Correlating Warrants are exercisable at an exercise price
determined upon the achievement of certain benchmarks contained in the Company's
Bylaws (as restated on May 6, 1997).
The Options are exercisable at various exercise prices through December
31, 2006. In each twelve month period in which all Options are not exercised in
full, the number of Options available for exercise during the following twelve
month period shall be reduced. The Plan Options provide that upon an exercise of
an incentive stock option (by an option holder other than the Investors) granted
prior to May 6, 1997, the Investors have the right to purchase, on the same
conditions, a number of shares of Common Stock equal to one-half of the shares
acquired by such option holder pursuant to such option exercise.
The Company and the Investors also entered into a Preferred Shareholder
Agreement, pursuant to which, for a period of two years, unless the majority of
the directors elected by the holders of the Common Stock consent or either of
the Investors should die, neither Investor may transfer any of the Preferred
Stock or rights therein except to certain specified individuals or entities.
That agreement also provided that in the event of a proposed sale to an
unrelated party following the death of either of the Investors, the Company has
a right of first refusal to acquire the Preferred Stock. In addition, for two
years after the Closing Date, neither Investor is permitted to acquire any
Common Stock, options, subscriptions, warrants, calls, commitments or rights
from any other shareholder of the Company unless a majority of the Common
Directors consent in writing. For a period beginning two years after May 6, 1997
and ending four years
14
<PAGE> 18
after such date, neither Investor individually, nor the Investors together, may
acquire or hold Common Stock or any outstanding security or other instrument
from the other shareholders, which, together with the shares underlying the
Correlating Warrants and the Options exceed 50% of the outstanding shares of the
Company on a fully diluted basis, without the consent of the majority of the
Common Directors.
The Company and the Investors also entered into a Registration Rights
Agreement pursuant to which the Company granted the Investors registration
rights with respect to shares of Common Stock issuable upon conversion or
exercise of the Preferred Stock, the Correlating Warrants, the Options and the
Plan Options. The rights include on demand registration and piggyback
registration rights.
As described in "Vote Required and Quorum" above, the holders of
Preferred Stock have the right to elect the Preferred Directors and must consent
to the Common Director's nomination of the Swing Director, which consent may not
be unreasonably withheld.
On September 25, 1997, with the consent of the Common Directors of the
Company, James M. Williams, Jr. transferred his Preferred Shares to the
Partnership, of which Mr. Williams, Jr. is a general partner. In addition, he
transferred his interest in the Options, the Correlating Warrants and the Plan
Options to the Partnership.
15
<PAGE> 19
STOCK PERFORMANCE GRAPH
The following graph sets forth the cumulative total shareholder return
(assuming reinvestment of dividends) to the Company's holders of Common Stock
since December 31, 1992, as well as an overall stock market index (Standard
&Poor's 500 Index) and the Company's self-constructed peer group index. The
stock performance graph assumes $100 was invested in each of the Company's
Common Stock and each index on December 31, 1992.
There currently is no established trading market for shares of the
Company's Common Stock, and although the outstanding shares have been registered
under applicable securities laws, no assurance can be given that a liquid market
will develop in the future or that quotations for the Common Stock will be
available. Additionally, the Company does not now maintain stock price
information from transactions involving purchases and sales of the outstanding
Common Stock. Pursuant to the terms of the 401(k) Plan, the Company is required
to obtain on a quarterly basis an independent appraisal of the Company for
purposes of determining the "fair market value" of the Common Stock.
Accordingly, the Company engages two independent appraisers to conduct quarterly
appraisals of the Company. The information regarding the price performance of
the Common Stock in the following table is based upon independent appraisals as
of December 31st of each of the years presented. No assurances can be given that
the appraisals reflect the actual price at which the Common Stock has traded or
would have traded had there been a market for the Common Stock.
[GRAPH]
<TABLE>
<CAPTION>
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
S&P 500.......... $100.00 $142.56 $139.72 $187.37 $225.34 $295.22
Law Companies... $100.00 $160.33 $123.46 $ 79.02 $ 58.93 $ 69.25
Competitive
Index............ $100.00 $101.91 $ 73.23 $ 76.86 $100.45 $113.12
</TABLE>
(1) The competitive index includes the following companies: Michael Baker
Corp.; Inc.; Harding Lawson Associates Group, Inc.; International
Technology Corp.; Groundwater Technology Inc.; and Roy F. Weston, Inc. For
purposes of computing the index, these companies have been weighted based
on their respective market capitalizations.
16
<PAGE> 20
INDEPENDENT AUDITORS
The firm of Ernst & Young LLP ("Ernst & Young"), independent certified
public accountants, audited the Consolidated Financial Statements of the Company
as of and for the year ended December 31, 1997. This firm has served in this
capacity since 1987. It is expected that representatives of Ernst & Young will
attend the Annual Meeting with an opportunity to make a statement if they so
desire and will be available to answer appropriate questions.
SHAREHOLDER PROPOSALS
Any proposal by a shareholder intended to be presented at the Annual
Meeting of Shareholders to be held in 1999, must be received by the Company on
or before December 4, 1998 to be included in the proxy materials of the Company
relating to such meeting.
OTHER BUSINESS
It is not anticipated that any other matters will be brought before the
Annual Meeting for action; however, if any such other matters shall properly
come before the Annual Meeting, it is intended that the persons authorized under
the proxies may, in the absence of instructions to the contrary, vote or act
thereon in accordance with their best judgment.
Kennesaw, Georgia
April 3, 1998
The Company's Annual Report on Form 10-K for the year ended December 31, 1997,
which includes audited financial statements, has been mailed to the shareholders
of the Company with these proxy materials. The Annual Report does not form any
part of the material for the solicitation of proxies.
17
<PAGE> 21
APPENDIX A
THE LAW COMPANIES GROUP, INC. 401(K) SAVINGS PLAN TRUST
TRUSTEE INSTRUCTION FORM
Pursuant to the provisions of Section 4.3(b) of the Law Companies Group, Inc.
401(k) Savings Plan Trust (the "Trust"), the undersigned Participant in The Law
Companies Group, Inc. 401(k) Savings Plan (the "Plan") hereby directs the
Trustees of the Trust to vote all common stock of The Law Companies Group, Inc.
allocated to the undersigned's account under the Plan, at the Annual Meeting of
Shareholders to be held on May 11, 1998, and at all adjournments thereof, as
follows:
ELECTION OF COMMON DIRECTORS AND SWING DIRECTOR
To elect seven directors to serve on the Board of Law Companies Group, Inc.
comprised of the following director nominees:
<TABLE>
<S> <C>
Peter D. Brettell Walter T. Kiser
Bruce C. Coles Frank B. Lockridge
Robert B. Fooshee Clay E. Sams
John Y. Williams (Swing Director)
[ ] FOR all director nominees listed above [ ] WITHHOLD AUTHORITY to vote for all director
(except as marked to the contrary). nominees listed above.
</TABLE>
In their discretion, the Trustees are authorized to vote upon such other
business matters as properly may come before the Annual Meeting and any
adjournments thereof.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL DIRECTOR
NOMINEE, STRIKE A LINE THROUGH THAT DIRECTOR NOMINEE'S NAME IN THE
RESPECTIVE LIST ABOVE. (OVER)
Please sign and date this Trustee Instruction Form, complete the information
below, and return the completed form to Jon A. McCarthy, 114 TownPark Drive,
Kennesaw, Georgia 30144, on or before May 1, 1998.
Dated this day of , 1998.
--------- ---------
--------------------------------------------
Signature
--------------------------------------------
Printed Name
--------------------------------------------
Social Security Number
<PAGE> 22
APPENDIX B
LAW COMPANIES GROUP, INC.
THREE RAVINIA DRIVE, SUITE 1830
ATLANTA, GEORGIA 30346
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
hereby appoints Gerald H. Fogle and Wilbur Charles Greer and each of them with
power of substitution in each, proxies to appear and vote, as designated below,
all common stock of Law Companies Group, Inc. held of record on March 23, 1998
by the undersigned, at the Annual Meeting of Shareholders to be held on May 11,
1998, and at all adjournments thereof.
The Board of Directors recommends a vote FOR approval of all director nominees
listed below.
ELECTION OF COMMON DIRECTORS AND SWING DIRECTOR
To elect seven directors to serve on the Board of Law Companies Group, Inc.
comprised of the following director nominees:
<TABLE>
<S> <C> <C>
Peter D. Brettell Walter T. Kiser
Bruce C. Coles Frank B. Lockridge
Robert B. Fooshee Clay E. Sams
John Y. Williams (Swing Director)
[ ] FOR all director nominees listed above (except as [ ] WITHHOLD AUTHORITY to vote for all director
marked to the contrary). nominees listed above.
</TABLE>
In their discretion, the proxies are authorized to vote upon such other business
matters as properly may come before the Annual Meeting and any adjournments
thereof.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL DIRECTOR
NOMINEE, STRIKE A LINE THROUGH THAT DIRECTOR NOMINEE'S NAME IN THE
RESPECTIVE LIST ABOVE. (OVER)
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS INDICATED. IF NO
INDICATION IS MADE, IT WILL BE VOTED IN FAVOR OF ALL DIRECTOR-NOMINEES.
Dated this ___ day of __________ , 1998.
-----------------------------------------
Signature
-----------------------------------------
Printed Name
-----------------------------------------
Social Security Number
(Please print, date and sign as name
appears on proxy. When shares are held by
joint tenants, both should print and sign.
When signing in a fiduciary or
representative capacity, give full title as
such.)
PLEASE MARK, DATE AND SIGN THIS PROXY, INDICATING ANY CHANGE OF ADDRESS, AND
RETURN IT PROMPTLY TO DEBRA R. ISBITTS, LAW COMPANIES GROUP, INC., THREE RAVINIA
DRIVE, SUITE 1830, ATLANTA, GEORGIA 30346 IN THE ENCLOSED RETURN ENVELOPE.
