<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
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
Diamond Technology Partners Incorporated
(Name of Registrant as Specified in Its Charter)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(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
DIAMOND TECHNOLOGY PARTNERS
DIAMOND TECHNOLOGY PARTNERS INCORPORATED
875 NORTH MICHIGAN AVENUE
SUITE 3000
CHICAGO, ILLINOIS 60611
NOTICE OF ANNUAL MEETING
The Annual Meeting of stockholders of Diamond Technology Partners
Incorporated (the "Company") will be held on Wednesday, October 29, 1997, at
10:00 A.M., at the Signature Room on The 95th Floor, John Hancock Center, 875 N.
Michigan Avenue, Suite 3000, Chicago, Illinois, for the purpose of:
1. Electing three directors to serve until the Annual Meeting of
Stockholders of the Company in 2000.
2. Confirming the appointment of the independent auditors of the Company
for the current fiscal year.
3. Transacting such other business as may properly come before the meeting.
The Board of Directors has fixed the close of business on September 5, 1997
as the record date for the determination of stockholders entitled to notice of,
and to vote at, the Annual Meeting or any adjournment thereof.
Christopher J. Moffitt
Secretary
September 30, 1997
THE COMPANY'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED MARCH 31, 1997 IS
BEING MAILED TO STOCKHOLDERS CONCURRENTLY HEREWITH. THE ANNUAL REPORT CONTAINS
FINANCIAL AND OTHER INFORMATION ABOUT THE COMPANY, BUT IS NOT INCORPORATED INTO
THE PROXY STATEMENT AND IS NOT DEEMED TO BE A PART OF THE PROXY SOLICITING
MATERIAL.
------------------------
PLEASE PROMPTLY FILL OUT, SIGN, DATE AND MAIL THE ENCLOSED FORM OF PROXY IF
YOU DO NOT EXPECT TO BE PRESENT AT THE ANNUAL MEETING. A SELF-ADDRESSED ENVELOPE
IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
<PAGE> 3
DIAMOND TECHNOLOGY PARTNERS INCORPORATED
875 NORTH MICHIGAN AVENUE
SUITE 3000
CHICAGO, ILLINOIS 60611
PROXY STATEMENT
SEPTEMBER 30, 1997
This Proxy Statement is furnished in connection with the solicitation by
the directors of Diamond Technology Partners Incorporated, a Delaware
corporation (the "Company"), of proxies to be used at the Annual Meeting of
stockholders of the Company to be held on October 29, 1997 (the "Annual
Meeting"). This Proxy Statement and the related form of proxy are being mailed
to stockholders commencing on or about September 30, 1997.
If the enclosed form of proxy is executed and returned, the shares
represented by them will be voted as directed on all matters properly coming
before the Annual Meeting for a vote. The proxies may be revoked at any time
prior to their exercise by giving notice to the Company in writing or by a later
executed proxy. Attendance at the Annual Meeting will not automatically revoke a
proxy, but a stockholder attending the Annual Meeting may request a ballot and
vote in person, thereby revoking a prior granted proxy.
Stockholders of record at the close of business on September 5, 1997 will
be entitled to vote at the Annual Meeting. On that date, the Company had
outstanding and entitled to vote 6,700,256 shares of Class A Common Stock, par
value $0.01 per share ("Class A Common"), and 4,908,112 shares of Class B Common
Stock, par value $0.01 per share ("Class B Common" and, together with the Class
A Common, the "Common Stock"). Each share of Class A Common is entitled to one
vote for a nominee for each of the three directorships to be filled and one vote
on each other matter brought before the Annual Meeting. Each share of Class B
Common is entitled to five votes for each such nominee and five votes on each
other matter brought before the Annual Meeting. The shares of Class B Common
will be voted by Melvyn E. Bergstein, CEO of the Company pursuant to an
irrevocable proxy granted to Mr. Bergstein by the holders of Class B Common.
At the Annual Meeting, in accordance with Delaware law and the Company's
By-Laws, the inspectors of election appointed by the Board of Directors for the
Annual Meeting shall determine the presence of a quorum and shall tabulate the
results of stockholder voting. As provided by Delaware law and the Company's
By-Laws, the holders of a majority of the Company's stock, issued and
outstanding, and entitled to vote at the Annual Meeting and present in person or
by proxy at the Annual Meeting, shall constitute a quorum for such meeting. The
inspectors of election will treat properly executed proxies marked "abstain" as
"present" for purposes of determining whether a quorum has been achieved at the
Annual Meeting. Such inspectors shall also treat proxies held in "street name"
by brokers that are not voted on all proposals to come before the Annual Meeting
("broker non-votes") as "present."
Class A Common and Class B Common will vote as a single class on all
matters anticipated to be brought before the Annual Meeting. In accordance with
Delaware law, nominees for election as directors receiving the greatest number
of votes will be elected directors. In accordance with Delaware law and the
Company's By-Laws, the holders of a majority of the voting power of shares of
the Company's stock which has voting power present in person or by proxy, and
which is actually voted, shall decide any other proposal which is brought before
the Annual Meeting. As a result, abstentions in respect of any proposal and
broker non-votes will not be counted for purposes of determining whether such
proposal has received the requisite approval by the Company's stockholders.
In accordance with Delaware law and the Company's By-Laws, the Company may,
by a vote of the stockholders, adjourn the Annual Meeting to a later date or
dates, without changing the record date. If the Company were to determine that
an adjournment were desirable, the appointed proxies would use the discretionary
authority granted pursuant to the proxy cards to vote in favor of such an
adjournment.
<PAGE> 4
BUSINESS TO BE TRANSACTED
The Board of Directors will present two proposals to the stockholders of
the Company at the Annual Meeting. Information concerning the first proposal,
"Election of Directors", is found on pages 2 to 15 of this Proxy Statement.
Information concerning the second proposal, "Confirmation of Appointment of
Independent Auditors", is found on page 15 of this Proxy Statement.
1. ELECTION OF DIRECTORS
IDENTIFICATION OF DIRECTORS
The incumbent directors of the Company are as follows:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITIONS SINCE
---- --- --------- --------
<S> <C> <C> <C>
Melvyn E. Bergstein(2)............... 55 Chairman of the Board of Directors, Chief 1994
Executive Officer And President
Christopher J. Moffitt(3)(5)......... 42 Senior Vice President, Secretary and Director 1994
Michael E. Mikolajczyk(1)............ 45 Senior Vice President, Chief Financial and 1994
Administrative Officer, Treasurer and Director
James C. Spira(3)(4)................. 54 Senior Vice President and Director 1995
Donald R. Caldwell(1)(4)(5).......... 51 Director 1994
Edward R. Anderson(3)(5)............. 50 Director 1994
John D. Loewenberg(2)(4)............. 57 Director 1996
Alan Kay(1).......................... 57 Director 1996
</TABLE>
- -------------------------
(1) Term expires as of the 1997 Annual Meeting of Stockholders
(2) Term expires as of the 1998 Annual Meeting of Stockholders
(3) Term expires as of the 1999 Annual Meeting of Stockholders
(4) Member of the Audit Committee
(5) Member of the Compensation Committee
NOMINEES
It is intended that shares represented by proxies in the enclosed form will
be voted for the election of the nominees identified below to serve as directors
for a term of three years and until their successors are elected, unless
contrary instructions are received. All of the nominees listed below presently
serve as directors of the Company. If an unexpected occurrence should make it
necessary, in the judgment of the proxy holders, to substitute some other person
for any of the nominees, such shares will be voted for such other person as the
proxy holders may select.
Donald R. Caldwell............ Mr. Caldwell has been the president and chief
operating officer of Safeguard Scientifics,
Inc. ("Safeguard") since February 1996 and a
director of Safeguard since May 1996. Mr.
Caldwell was an executive vice president of
Safeguard from December 1993 to February 1996.
Prior to such time, Mr. Caldwell was the
president of Valley Forge Capital Group, Ltd.,
a business mergers and acquisition advisory
firm that he founded from April 1991 to
December 1993 and an executive officer of a
predecessor company of Cambridge Technology
Partners (Massachusetts), Inc., a provider of
information technology consulting and software
development, from December 1989 to March 1991.
Mr. Caldwell's prior positions included serving
as a partner in the national office of Arthur
Young & Co. (a predecessor to Ernst & Young,
LLP).
2
<PAGE> 5
Mr. Caldwell serves on the board of directors
of Integrated Systems Consulting Group, Inc.
(one of the Safeguard partnership companies),
Safeguard, CompuCom Systems, Inc. and Quaker
Chemical Corp.
Alan Kay...................... Dr. Kay is currently vice president of research
and development for Walt Disney Imagineering,
Inc. and is a Disney fellow. From 1984 to 1996,
Dr. Kay was an Apple fellow at Apple Computer,
Inc. From 1982 to 1984, he was chief scientist
of Atari Corporation. From 1971 to 1982, he was
a member of research staff, principal
scientist, and Xerox fellow at the Xerox Palo
Alto Research Center. From 1969 to 1971, he was
a research associate and lecturer in computer
science at Stanford University.
Michael E. Mikolajczyk........ Mr. Mikolajczyk joined the Company in April
1994 and has served as Senior Vice President,
Chief Financial and Administrative Officer and
a member of its Board of Directors since that
time. From 1993 to 1994, he served as senior
vice president of finance and administration
and chief financial officer for Technology
Solutions Company. From 1981 to 1993, Mr.
Mikolajczyk was with MCI Telecommunications
Corporation where he served at various times as
vice president of finance and administration
for both its Business Services Division and its
Central Division, vice president of corporate
development and analysis, vice president of
business analysis, tariffs and contracts, and
vice president of marketing and finance for
MCI's Digital Information Services Company. Mr.
Mikolajczyk received his bachelors degree from
Wayne State University and his M.B.A. from
Harvard Business School.
DIRECTORS CONTINUING IN OFFICE
The following directors' terms in office continue beyond the 1997 Annual
Meeting of stockholders:
Edward R. Anderson............ Mr. Anderson has been president, chief
executive officer and a director of CompuCom
Systems, Inc., a PC dealer and network
integration company and a Safeguard partnership
company since January 1994. He joined CompuCom
as chief operating officer in August 1993. From
1988 to 1993, Mr. Anderson served as president
and chief operating officer of ComputerLand
Corporation. From 1984 to 1988, he served as
vice president of marketing, chief financial
officer, and as a member of the board of
directors and the executive management team of
the Computer Factory. Mr. Anderson began his
career in 1974 as a financial analyst with W.
R. Grace & Company, serving as director of real
estate and vice president of planning and
control, for specialty retailing until 1980. He
served as vice president of strategic planning
and business development for a division of the
American Express Company.
Melvyn E. Bergstein........... Mr. Bergstein co-founded the Company in January
1994 and has served as its Chairman, Chief
Executive Officer and President since that
time. From 1991 to 1993, Mr. Bergstein at
various times served as vice chairman,
executive vice president, president and
co-chief executive officer, and a member of the
board of directors of Technology Solutions
Company, a publicly traded, Chicago-based
systems integrator. From 1989 to 1991, he was
senior vice
3
<PAGE> 6
president -- systems integration for Computer
Sciences Corporation. From 1968 to 1989, Mr.
Bergstein held a number of positions with
Arthur Andersen & Co.'s consulting division
(now Andersen Consulting). While with Andersen
Consulting, Mr. Bergstein served as partner
from 1977 to 1989 and managing director of
worldwide technology from 1985 to 1989. Mr.
Bergstein served on Arthur Andersen's board
during the 1985 to 1989 period, and as chairman
of Arthur Andersen's Consulting Oversight
Committee during 1989. Mr. Bergstein received
his bachelors degree from the University of
Pennsylvania. Mr. Bergstein is also a member of
the board of directors of Integrated Systems
Consulting Group, Inc., a publicly traded
company and a Safeguard partnership company.
John D. Loewenberg............ Mr. Loewenberg is currently managing partner
and a consultant with JDL Enterprises, a
consulting firm. Previously, Mr. Loewenberg was
an executive vice president and chief operating
officer of Connecticut Mutual, a life insurance
company, from May 1995 through 1996. Prior to
joining Connecticut Mutual, Mr. Loewenberg
served as senior vice president of Aetna Life
and Casualty, a multi-line insurer, and as
chief executive officer of Aetna Information
Technology, the information systems company of
Aetna Life and Casualty, from March 1989 to May
1995. Mr. Loewenberg was chairman of Precision
Systems, Inc. until April 1996 and is a
director of CompuCom Systems, Inc., and Sanchez
Computer Associates, Inc., two of Safeguard's
partnership companies.
Christopher J. Moffitt........ Mr. Moffitt co-founded the Company in January
1994 and has served as Senior Vice President,
Secretary and a member of the Board of
Directors of the Company since that time. From
1988 to 1993, he served as senior vice
president of Technology Solutions Company. From
1986 to 1988, Mr. Moffitt was a principal in
the Management Consulting Group of Arthur Young
(now Ernst & Young) where he became a partner
in 1988. From 1981 to 1986, Mr. Moffitt served
as director of information systems for Neiman
Marcus. Mr. Moffitt began his career in 1974
with Electronic Data Systems as a systems
engineer and account manager. Mr. Moffitt
received his bachelors degree from the
University of Miami.
James C. Spira................ Mr. Spira joined the Company in November 1995
and has served as Senior Vice President since
that time. He became a member of its Board of
Directors in February 1996. From 1991 to 1995,
Mr. Spira was a group vice president of the
Tranzonic Companies, Inc., a $200 million
public corporation specializing in the
manufacture and distribution of quality paper,
cloth and vinyl products. Prior to that time,
Mr. Spira co-founded Cleveland Consulting
Associates in 1974, where he served as the
firm's president and chief executive officer.
Mr. Spira serves on the board of directors of
CIBER, Inc., and The Tranzonic Companies. Mr.
Spira holds an M.B.A. from the University of
Pennsylvania's Wharton School and a B.A. in
history from Hobart College.
4
<PAGE> 7
DIRECTORS' MEETINGS AND COMMITTEES
The Board of Directors has an Audit Committee, which has authority to
review and recommend to the Board internal accounting and financial controls for
the Company and accounting principles and auditing practices and procedures to
be employed in the preparation and review of financial statements. The Audit
Committee was established on February 18, 1997 and did not meet during fiscal
1997. The Board of Directors also has a Compensation Committee, which has
authority to review and recommend to the Chief Executive Officer and the Board
policies, practices and procedures relating to the compensation of managerial
employees and the establishment and administration of employee benefit plans,
except for stock option plans. The Compensation Committee was established on
February 18, 1997 and did not meet during fiscal 1997. The Company's By-Laws
provide that a majority of the Compensation Committee shall consist of members
of the Board of Directors who are not officers or employees of the Company or
any subsidiary of the Company. The Board of Directors has no Nominating
Committee.
The Board of Directors held five meetings in fiscal 1997. All of the
directors attended at least 75 percent of the total meetings held by the Board
of Directors and by the committees on which they served during fiscal 1997.
COMPENSATION OF DIRECTORS
Directors receive no cash compensation for their services as directors,
except for reimbursement of expenses incurred in connection with attending
meetings of the Board of Directors and its committees. Directors who are not
employees of the Company or of Safeguard are granted options to purchase Class A
Common of the Company in the discretion of the Board of Directors. The exercise
price of each option is equal to the fair market value of the shares on the date
of grant. The options vest over a period of five years and have a term of seven
years. In fiscal 1997, Messrs. Anderson, Kay and Loewenberg were granted options
to purchase 16,500, 110,001 and 16,500 shares of Class A Common, respectively,
at exercise prices of $3.18, $1.82 and $3.18, respectively.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth certain information concerning compensation
paid or accrued in fiscal years 1996 and 1997 with respect to the Company's
Chief Executive Officer and all of its other executive officers at March 31,
1997 (collectively, the "Named Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION(1) AWARDS--
----------------------- SECURITIES
FISCAL OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY COMPENSATION OPTIONS COMPENSATION(2)
- --------------------------- ------ ------ ------------ ---------- ---------------
<S> <C> <C> <C> <C> <C>
Melvyn E. Bergstein.................. 1997 $503,125 $ -- -- $8,550
Chairman, Chief Executive Officer, 1996 480,000 127,207(3) -- 5,472
and President
Christopher J. Moffitt............... 1997 431,250 -- -- 1,938
Senior Vice President, and Secretary 1996 400,000 105,630(4) -- 1,938
Michael E. Mikolajczyk............... 1997 383,333 -- 37,529 3,306
Senior Vice President, Chief 1996 360,000 92,548(5) 16,500 1,938
Financial and Administrative Officer
and Treasurer
James C. Spira....................... 1997 479,169 -- -- 5,472
Senior Vice President 1996 208,789(6) -- 74,250 456
</TABLE>
- -------------------------
(1) The compensation described in this table does not include medical, group
life insurance or other benefits received by the Named Officers which are
available generally to all salaried employees of the Company and certain
perquisites and other personal benefits, securities or property received by
the Named Officers
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<PAGE> 8
which do not exceed the lesser of $50,000 or 10% of the aggregate of any
such Named Officer's salary in the fiscal year.
(2) Represents excess group life insurance premiums paid in the respective year.
(3) Includes $120,000 of deferred compensation earned but not paid during the
year ended March 31, 1996 and $7,207 of interest on such cumulative amounts.
(4) Includes $100,000 of deferred compensation earned but not paid during the
year ended March 31, 1996 and $5,630 of interest on such cumulative amounts.
(5) Includes $90,000 of deferred compensation earned but not paid during the
year ended March 31, 1996 and $2,548 of interest on such cumulative amounts.
(6) Represents a partial year as Mr. Spira joined the Company in November 1995.
DEFERRED COMPENSATION
From the inception of the Company through March 31, 1996, certain employee
base salaries were reduced by a percentage which was to be paid at a future
date, plus accrued interest. Amounts deferred under this program initially
ranged from 20% to 40% of base salary and were subsequently revised to 20% of
base salary effective April 1, 1995 for all participants. Certain amounts of
this deferred compensation were exchanged for Common Stock in January 1995 and
April 1996.
After March 31, 1996, the deferral of compensation for these employees was
discontinued. As a result of losses sustained by the Company in the first two
quarters of fiscal 1997, each of these employees agreed to waive their rights to
deferred compensation if the Company did not achieve certain revenue targets in
the third and fourth quarters of fiscal 1997. Pursuant to this agreement, these
employees forgave prior years' deferred compensation totaling approximately
$485,000 during each of the third and fourth quarters of fiscal 1997.
EMPLOYMENT AGREEMENTS
The Company entered into Employment Agreements with Mr. Bergstein, Mr.
Moffitt, Mr. Mikolajczyk and Mr. Spira that provide for annual salaries and
bonuses of up to 100% of annual salaries. The annual salaries are subject to
annual reviews. The Employment Agreements are terminable at any time by either
party and contain non-competition provisions, which last for 18 months following
cessation of employment with the Company. In addition, the Employment Agreements
prohibit the individuals from disclosing any of the Company's confidential
information and require the individuals to disclose to the Company, and to grant
ownership to the Company all ideas, inventions and business plans developed
during the course of employment to the extent they relate to the business of the
Company, result from work performed for the Company or result from use of any of
the Company's property. Mr. Bergstein's agreement is dated February 1, 1994 and
provides for a current annual salary of $525,000. Mr. Moffitt's agreement is
dated February 1, 1994 and provides for a current annual salary of $450,000. Mr.
Mikolajczyk's agreement is dated April 18, 1994 and provides for a current
annual salary of $400,000. Mr. Spira's agreement is dated November 1, 1995 and
provides for a current annual salary of $450,000. As a result of losses
sustained by the Company in the first two quarters of fiscal 1997, each of these
Partners agreed to an 8.3% salary reduction for the twelve-month period ending
September 30, 1997.
6
<PAGE> 9
STOCK OPTIONS
The following table provides information on stock options granted by the
Company in fiscal 1997 to the Named Officers. All Company option grants depicted
below were made pursuant to the Company's Amended and Restated 1994 Stock Option
Plan.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
VALUE AT ASSUMED
ANNUAL RATE OF
NUMBER OF PERCENT OF STOCK PRICE
SHARES TOTAL OPTIONS APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(2)
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION -------------------
NAME GRANTED(1) FISCAL YEAR SHARE DATE 5% 10%
---- ---------- ------------- --------- ---------- -- ---
<S> <C> <C> <C> <C> <C> <C>
Melvyn E. Bergstein............. -- --% $ -- -- $ -- $ --
Christopher J. Moffitt.......... -- -- -- -- -- --
Michael E. Mikolajczyk.......... 16,500 1 1.82 3/31/03 12,225 28,490
6,397 -- 3.18 10/31/03 8,281 19,299
14,632 1 2.27 10/31/03 13,522 31,511
James C. Spira.................. -- -- -- -- -- --
</TABLE>
- -------------------------
(1) Options to purchase Class B Common, vesting incrementally with 10%, 15%,
25%, 25% and 25% of the option vesting on the first through fifth
anniversaries of the date of grant, respectively, and expiring on the
seventh anniversary of the date of grant. The options are not transferable
in any way other than upon the death of the employee. Shares issued upon the
exercise of these options are subject to the terms and restrictions
contained in the Voting and Stock Restriction Agreement.
(2) The amounts shown are calculated assuming that the Common Stock market value
was equal to the exercise price per share as of the date of grant of the
options. This value is the approximate price per share at which shares of
the Common Stock would have been sold in private transactions on or about
the date on which the options were granted. The dollar amounts under these
columns assume a compounded annual market price increase for the underlying
shares of the Common Stock from the date of grant to the end of the option
term of 5% and 10%. This format is prescribed by the Securities and Exchange
Commission and is not intended to forecast future appreciation of shares of
the Common Stock. The actual value, if any, a Named Officer may realize will
depend on the excess of the market price for shares of the Common Stock on
the date the option is exercised over the exercise price. Accordingly, there
is no assurance that the value realized by a Named Officer will be at or
near the value estimated above.
The following table sets forth information concerning options exercised
during fiscal 1997 and the number and the hypothetical value of certain
unexercised options of the Company held by the Named Officers as of March 31,
1997. This table is presented solely for purposes of complying with the
Commission rules and does not necessarily reflect the amounts the optionees will
actually receive upon any sale of the shares acquired upon exercise of the
options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES MARCH 31, 1997 MARCH 31, 1997
ACQUIRED VALUE ---------------------------- ----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Melvyn E. Bergstein......... -- -- -- -- $ -- $ --
Christopher J. Moffitt...... -- -- -- -- -- --
Michael E. Mikolajczyk...... -- -- 1,650 52,379 6,897 213,725
James C. Spira.............. -- -- 7,425 66,825 31,037 279,329
</TABLE>
7
<PAGE> 10
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Company's Board of Directors (the
"Compensation Committee") was established on February 18, 1997 and did not meet
to consider executive officer compensation for the fiscal year ended March 31,
1997. Accordingly, the functions of the Compensation Committee were carried out
by the full Board of Directors. The Board of Directors has furnished the
following report on executive compensation:
REPORT ON EXECUTIVE COMPENSATION
The compensation of the Named Officers and all other executive
officers was determined in accordance with the Partners' Operating
Agreement and the Partners' Compensation Program, under which the officers'
compensation was approved by the Company's Management and Management
Compensation Committees, each of which is a non-board committee composed of
Partners, and by the Board of Directors. The purpose and design of this
structure is to provide a combination of base salary, bonus and equity to
the Company's Partners that will link individual rewards to the Company's
success, motivate teamwork, encourage the Partners to maintain equity
interests in the Company and reward individual performance. Each of the
Company's officers is a Partner.
Base salaries are established on the basis of the officers' experience
and contributions to the Company. Bonuses are based on the Company's
achievement of certain targets established in its annual business plan. The
Partners' Compensation Program provides that a portion of the bonus will be
paid in cash and that a portion will be distributed as equity -- either
restricted stock, stock appreciation rights or stock options. The Named
Officers, as Partners, share in a bonus pool established pursuant to a
formula that first provides for a return on revenue and for bonuses to
non-Partner employees. Target bonuses for all Partners, as a percentage of
base salary, are established prior to the fiscal year in which they take
effect. No bonuses were paid to the Named Officers for fiscal 1997.
CEO COMPENSATION
Mr. Bergstein's salary for the year ended March 31, 1997 was $503,125
as compared to $480,000 for the prior fiscal year. He, like all the other
Partners, also waived his rights to certain deferred compensation accrued
for prior years (in his case in the amount of $196,180), when the Company
did not achieve certain revenue targets in the third and fourth quarters of
fiscal 1997. Mr. Bergstein's compensation was based on his leadership of
the Company; the Company's dramatic growth since being founded in early
1994; his contributions to recruiting key employees, directors and advisory
board members; and his contribution to the revenues of the Company by
attracting significant clients and by actively participating in serving the
Company's clients. As with all other Partners, Mr. Bergstein's compensation
as Chief Executive Officer is subject to the approval of the Management
Committee, the Management Compensation Committee, the Partners and the
Board of Directors. The Board of Directors believes his compensation to be
reasonable.
POLICY ON QUALIFYING COMPENSATION
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), provides that publicly held companies may not deduct in any
taxable year compensation in excess of one million dollars paid to any of
the individuals named in the Summary Compensation Table that is not
"performance-based" as defined in Section 162(m). In order for incentive
compensation to qualify as "performance-based" compensation under Section
162(m), the Company's discretion to grant awards must be strictly limited.
The Board of Directors believes that the benefit to the Company of
retaining the ability to exercise discretion under the Company's incentive
compensation plans outweighs the limited risk of loss
8
<PAGE> 11
of tax deductions under Section 162(m). Therefore, the Company does not
currently intend to seek to qualify its incentive compensation plans under
Section 162(m).
By the Board of Directors:
Edward R. Anderson
Melvyn E. Bergstein
Donald R. Caldwell
Alan Kay
John D. Loewenberg
Michael E. Mikolajczyk
Christopher J. Moffitt
James C. Spira
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee currently consists of Mr. Anderson, Mr. Caldwell
and Mr. Moffitt. Mr. Moffitt is a Named Officer of the Company. None of the
Named Officers of the Company has served on the board of directors or on the
compensation committee of any other entity, any of whose officers served either
on the Board of Directors or on the Compensation Committee of the Company. The
Compensation Committee, however, was established on February 18, 1997 and did
not meet to consider executive officer compensation for the fiscal year ended
March 31, 1997. For fiscal 1997, recommendations concerning the aggregate
compensation of all of the Company's Partners (including its Named Officers) (as
designated by the Company) were made to the Board of Directors by the Company's
Chief Executive Officer and the Company's Management Committee. The Management
Committee is a non-board operating committee which has been established by the
Company pursuant to the terms of the Partners' Operating Agreement. Pursuant to
the terms of the Partners' Operating Agreement, allocations among the Company's
Partners (including its executive officers) were made by the Management
Committee upon approval of the aggregate amount of such compensation by the
Board of Directors and the approval of the actual allocations by at least
seventy percent of the Company's Partners. See "Partners' Operating Agreement"
on page 14.
9
<PAGE> 12
STOCK PRICE PERFORMANCE PRESENTATION
The following graph compares the Company's total annual stock price
performance on Class A Common against the total stock price performance of the
Nasdaq Market Index and the Russell 2000 Index for the periods indicated. The
Company does not believe that there is a representative published industry or
line-of-business index or a representative industry peer group of public
companies against which to measure the Company's stock price performance.
Therefore, under Securities and Exchange Commission regulations, the Company has
selected the Russell 2000 Index, an index of companies with similar market
capitalization to the Company, to use as a representative peer group. The graph
presents the year-end value of a $100 investment on February 25, 1997 in the
Company's Class A Common at the $5.50 initial offering price and in each of the
Nasdaq Market Index and the Russell 2000 Index and assumes the reinvestment of
dividends, if any.
<TABLE>
<CAPTION>
Diamond
Technology
Measurement Period Partners Nasdaq Market
(Fiscal Year Covered) Incorporated Russell 2000 Index Index
<S> <C> <C> <C>
2/25/97 100.00 100.00 100.00
3/31/97 109.09 95.28 93.54
</TABLE>
10
<PAGE> 13
BENEFICIAL OWNERSHIP OF CLASS A COMMON AND CLASS B COMMON
Set forth in the following table is the indicated information as of
September 5, 1997, with respect to (1) each person who is known to the Company
to be the beneficial owner of more than five percent of the Class A Common, (2)
each person who is known to the Company to be the beneficial owner of more than
five percent of the Class B Common and (3) the beneficial ownership of Class A
Common and Class B Common by the directors, and the Named Officers and all
executive officers and directors as a group. Beneficial ownership of Class A
Common and Class B Common has been determined for this purpose in accordance
with Rules 13d-3 and 13d-5 of the Securities and Exchange Commission ("SEC")
under the Securities Exchange Act of 1934, as amended, (the "Exchange Act")
which provide, among other things, that (a) a person is deemed to be the
beneficial owner of Class A Common or Class B Common if such person, directly or
indirectly, has or shares voting power or investment power with respect to such
stock or has the right to acquire such ownership within sixty days of the date
of the indicated information (November 4, 1997) and (b) when two or more persons
agree to act together for the purpose of holding, voting or disposing of Class B
Common, the group formed thereby is deemed to be a person which has acquired
beneficial ownership of all Class B Common beneficially owned by each member of
the group. Accordingly, the amounts shown in the table do not purport to
represent beneficial ownership for any purpose other than compliance with SEC
reporting requirements. Further, beneficial ownership as determined in this
manner does not necessarily bear on the economic incidence of ownership of Class
A Common or Class B Common.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
NAME AND ADDRESS(1) CLASS(2) SHARES CLASS(3)
- ------------------- -------- --------- ----------
<S> <C> <C> <C>
Melvyn E. Bergstein(4)...................................... Class A 266,951 4.0%
(Includes 4,421,692 shares reflected solely as a result of Class B 4,908,112 100
Mr. Bergstein's right to vote such shares and 753,371 shares
owned by Mr. Bergstein)
Safeguard Scientifics, Inc.(5).............................. Class A 1,443,668 20.8
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087
Technology Leaders(6)....................................... Class A 1,149,689 16.6
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087
Christopher J. Moffitt(7)................................... Class A 40,270 *
Class B 623,600 12.7
Michael E. Mikolajczyk(8)................................... Class A 3,788 *
Class B 544,087 11.0
James C. Spira(9)........................................... Class A 29,588 *
Class B 216,564 4.4
John D. Loewenberg(10)...................................... Class A 16,800 *
Alan Kay(11)................................................ Class A 22,000 *
Donald R. Caldwell(12)...................................... Class A 16,263 *
Edward R. Anderson(13)...................................... Class A 19,040 *
All executive officers and directors as a group (8 Class A 414,700 6.1
persons)(14).............................................. Class B 4,953,480 100.0
</TABLE>
- -------------------------
* Less than 1% of the class outstanding
(1) The address of each of Messrs. Bergstein, Moffitt and Mikolajczyk is 875
North Michigan Avenue, Suite 3000, Chicago, Illinois 60611.
11
<PAGE> 14
(2) In February 1997, the Company reclassified (i) the shares of then
outstanding common stock of the Company held by Safeguard, Technology
Leaders and all other nonemployee stockholders into shares of Class A
Common and (ii) the shares of then outstanding common stock of the Company
held by employee stockholders into shares of Class B Common. In the event
that any share of Class B Common is transferred to any party other than a
"Permitted Holder" (generally, an employee of the Company) or if a
beneficial or record holder of a share of Class B Common Stock ceases to be
a Permitted Holder, the share is automatically and immediately converted
into a share of Class A Common. Shares of Class A Common may not be
converted into shares of Class B Common.
(3) Solely for the purpose of determining beneficial ownership herein, the
number of shares of Common Stock deemed outstanding as of September 5, 1997
(i) assumes 6,700,256 shares of Class A Common and 4,908,112 shares of
Class B Common were outstanding as of such date, and (ii) includes
additional shares of Common Stock issuable pursuant to options or warrants
held by such owner which may be exercised within 60 days after the date of
September 5, 1997 ("presently exercisable options"), as set forth below.
(4) The shares represent 79.4% of the aggregate voting rights of the Common
Stock. Mr. Bergstein's voting rights include 4,314,029 shares of Class B
Common and 107,663 shares of Class A Common held by other persons who have
granted Mr. Bergstein the right to vote such shares pursuant to the terms
of irrevocable proxies. Mr. Bergstein has sole voting and investment power
over 594,083 shares of Class B Common and 159,288 shares of Class A Common
which represent a 6.5% direct ownership interest in the Common Stock. Mr.
Bergstein's direct ownership and voting rights exclude 199,880 shares of
Class A Common held in trust for certain members of the Bergstein family.
(5) The shares represent 4.6% of the aggregate voting rights of the Common
Stock. Includes a warrant which is presently exercisable for 241,182 shares
of Class A Common and the shares of Common Stock owned by CompuCom Systems,
Inc., of which Safeguard owns approximately 50% of the voting securities.
The warrant and all shares of Class A Common are held of record by
Safeguard Scientifics (Delaware), Inc., a privately held subsidiary of
Safeguard. Includes 153,690 shares of Class A Common granted by Safeguard
to certain of its employees pursuant to a long-term incentive plan (the
"LTIP Plan"). Safeguard will continue to exercise voting rights with
respect to these shares until the occurrence of certain vesting
requirements. Excludes all shares of Common Stock beneficially owned by
Technology Leaders, in which Safeguard has a beneficial interest. Excludes
all shares of Common Stock owned by Cambridge Technology Partners
(Massachusetts), Inc. of which Safeguard owns approximately 21% of the
voting securities. The largest shareholder of Safeguard is Warren V.
Musser, the chairman and chief executive officer of Safeguard, who is the
record holder of approximately 9.5% of the total Safeguard common shares
outstanding. See "Certain Relationships and Related Transactions" below.
(6) The shares represent 3.7% of the aggregate voting rights of the Common
Stock. Includes warrants issued to Technology Leaders L.P. and Technology
Leaders FR Corp., which are presently exercisable for 241,182 shares of
Class A Common. See "Certain Relationships and Related Transactions" below.
(7) Mr. Moffitt has granted Mr. Bergstein all voting rights with respect to
these shares pursuant to an irrevocable proxy. Excludes 84,250 shares of
Class A Common held in trust for certain members of the Moffitt family.
(8) Mr. Mikolajczyk has granted Mr. Bergstein all voting rights with respect to
these shares pursuant to an irrevocable proxy. Includes 26,804 shares of
Common Stock issuable pursuant to presently exercisable options. Excludes
41,250 shares of Class A Common held in trust for certain members of the
Mikolajczyk family.
(9) Mr. Spira has granted Mr. Bergstein all voting rights with respect to these
shares of Common Stock pursuant to an irrevocable proxy. Includes 18,564
shares of Common Stock issuable pursuant to presently exercisable options.
(10) Includes 3,300 shares of Class A Common issuable pursuant to presently
exercisable options.
(11) Consists of 22,000 shares of Class A Common issuable pursuant to presently
exercisable options.
12
<PAGE> 15
(12) Excludes all shares of Common Stock beneficially owned by Safeguard. Mr.
Caldwell serves as president and chief operating officer of Safeguard. Mr.
Caldwell disclaims beneficial ownership of such shares. Excludes 28,050
shares of Common Stock allocated to Mr. Caldwell under the LTIP Plan, of
which Mr. Caldwell has neither dispositive nor voting power.
(13) Includes 3,300 shares of Class A Common issuable pursuant to presently
exercisable options.
(14) The shares of Class A Common and Class B Common together represent 79.6% of
the aggregate voting rights of the Common Stock. Includes, in the
aggregate, 73,968 shares of Common Stock issuable pursuant to presently
exercisable options.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Technology Leaders Management L.P., a limited partnership, is the sole
general partner of Technology Leaders L.P. and a co-general partner of
Technology Leaders Offshore C.V. Technology Leaders L.P. and Technology Leaders
Offshore C.V. are venture capital funds that are required by their governing
documents to make all investment, voting and disposition actions in tandem.
Technology Leaders L.P. and Technology Leaders Offshore C.V. are referred to
collectively in this Proxy Statement as "Technology Leaders." Technology Leaders
Management L.P. has sole responsibility for all investment, voting and
disposition decisions for Technology Leaders. The general partners of Technology
Leaders Management L.P. are (i) Technology Leaders Management, Inc., a privately
held subsidiary of Safeguard, (ii) TL Partners I, a general partnership among
Technology Leaders Management, Inc. and the managing directors of Technology
Leaders Management, Inc., other than Mark J. DeNino, and (iii) four other
corporations (the "TLA Corporations") owned by individuals, one of whom serves
as a director of Safeguard, and three of whom are not currently otherwise
affiliated with Safeguard or the Company. Technology Leaders Management L.P. is
managed by an executive committee, by whose decisions the general partners have
agreed to be bound, that consists of seven voting members including (i) Warren
V. Musser, Robert E. Keith, Jr. and Gary J. Anderson, M.D., each of whom are
designees of Technology Leaders Management, Inc., and (ii) one designee of each
of the TLA Corporations. Clayton S. Rose is a non-voting member of that
executive committee. Technology Leaders Management, Inc. is the administrative
manager of Technology Leaders, subject to the control and direction of the
executive committee of Technology Leaders Management L.P. Mr. Musser is the
chairman and Mr. Keith is president and chief executive officer of Technology
Leaders Management, Inc. and Mr. Keith, Ira M. Lubert, Dr. Anderson, Mr. DeNino
and Christopher Moller, Ph.D., are the managing directors of Technology Leaders
Management, Inc. Mr. Keith, Mr. Lubert and Dr. Anderson are former officers of
Safeguard and Mr. Keith is a director of Safeguard.
Safeguard Scientifics (Delaware), Inc., a privately held subsidiary of
Safeguard, is a limited partner in Technology Leaders L.P. holding 3.3% of the
aggregate limited partnership interests in Technology Leaders L.P. Technology
Leaders Management, Inc. holds directly or indirectly 31% of the general
partnership interests in Technology Leaders Management L.P. Safeguard
Scientifics (Delaware), Inc., Technology Leaders and CIP Capital L.P. are
referred to collectively in this Proxy Statement as the "Investors."
In the second quarter of fiscal 1997, Safeguard exercised a warrant, issued
in 1994, to purchase 495,000 shares of Class A Common at an exercise price of
$1.21 per share.
The Company entered into a $2.0 million subordinated loan agreement with
Safeguard on November 8, 1996 for general working capital purposes. In
connection with this loan, the Company issued warrants to Safeguard for the
purchase of 526,597 shares of the Company's Common Stock at $5.50 per share. The
loan has a maturity date of November 1, 2001 but was required to be repaid in
full upon the consummation of the Initial Public Offering and bears interest at
rates which escalate 1.0% annually, starting at 6.0% in the initial year. The
Company repaid this loan on April 11, 1997 with proceeds from the Initial Public
Offering.
CANCELLATION OF PROMISSORY NOTE
Until being finally resolved by a global settlement among all parties in
June 1996, Melvyn E. Bergstein, Chairman, Chief Executive Officer and President
of the Company, the Company and others were involved in a lawsuit with
Technology Solutions Company ("TSC"). Because of the nature of the claims by Mr.
Bergstein
13
<PAGE> 16
and TSC, Mr. Bergstein and the Company were represented by the same counsel.
During the course of the litigation, the Company and Mr. Bergstein each paid
legal fees attributable to the litigation. Mr. Bergstein executed a promissory
note, dated April 14, 1995, under which he agreed to pay certain of the fees
paid by the Company, with interest at the applicable federal rate under IRS
regulations, after the conclusion of the litigation. The Company subsequently
determined, however, that the amounts due under the note more accurately
reflected fees attributable to the Company's defense and settlement of these
claims, and therefore the Company canceled the full amount ($226,402) due under
the note.
PARTNERS' OPERATING AGREEMENT
Certain employees of the Company are internally designated as "Partners."
The designation does not refer to a partner of a general or limited partnership.
All of the Partners of the Company have agreed to be bound by the Partners'
Operating Agreement. Each individual proposed to be hired as, or promoted to, a
Partner, must agree to become bound by and a party to the Partners' Operating
Agreement. The Partners' Operating Agreement provides for, among other things:
(i) nomination procedures for the nomination of candidates to the office of
Chief Executive Officer; (ii) procedures for the removal and retention of the
Chief Executive Officer; (iii) procedure for the admission and removal of
Partners; and (iv) the compensation of management personnel. In addition, the
Partners' Operating Agreement provides that the Chief Executive Officer must be
selected from among the Partners pursuant to the procedures set forth in such
Agreement, subject to the right of the Company's Board of Directors to veto any
such person nominated by the Partners. The Chief Executive Officer may be
removed by the Board of Directors or for certain other specified reasons.
VOTING AND STOCK RESTRICTION AGREEMENT
Each employee-stockholder and certain other stockholders of the Company
have agreed to be bound by the Second Amended and Restated Voting and Stock
Restriction Agreement dated as of April 1, 1996 (the "Voting and Stock
Restriction Agreement"). Any employee considering purchasing shares of the Class
B Common from the Company must agree to become bound by and a party to the
Voting and Stock Restriction Agreement (to the extent not already bound).
The Voting and Stock Restriction Agreement provides for, among other
things: (i) the grant of a proxy by each employee-stockholder of the Company to
the Chief Executive Officer of the Company conveying the right to vote their
shares of Class B Common, (ii) rights to purchase shares of certain
employee-stockholders upon termination of employment; (iii) rights of first
offer of the Company to purchase shares of Class B Common offered by
employee-stockholders; (iv) rights of first offer of the Company to purchase
shares of Common Stock offered by the Investors; (v) restrictions on pledges of
shares of Class B Common held by employees; and (vi) restrictions on the
transferability of the shares of Class B Common held by employees and shares of
Common Stock of the Investors.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent of a registered class of
the Company's equity securities, to file reports of ownership and changes in
ownership of such securities with the SEC and Nasdaq. Officers, directors and
greater than ten percent beneficial owners are required by applicable
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
Based upon its review of the copies of Section 16(a) forms received by it,
and upon written representations from reporting persons concerning the necessity
of filing a Form 5-Annual Statement of Changes in Beneficial Ownership, the
Company believes that, during fiscal 1997, all filing requirements applicable
for reporting persons were met, except as follows:
During fiscal year 1997, one report on behalf of Mr. Loewenberg (reporting
two transactions) under Section 16(a) of the Exchange Act was filed late.
14
<PAGE> 17
2. CONFIRMATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company recommends a vote for ratification of
the appointment of KPMG Peat Marwick LLP as the independent auditors of the
Company and its subsidiary to audit the books and accounts for the Company and
its subsidiary for the current fiscal year. It is intended that the shares
represented by proxies in the enclosed form will be voted for confirmation of
KPMG Peat Marwick LLP as the independent auditors, unless contrary instructions
are received. It is expected that representatives of KPMG Peat Marwick LLP will
attend the Annual Meeting, with the opportunity to make a statement if they so
desire, and will be available to respond to appropriate questions.
SUBMISSION OF STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be eligible for inclusion in the
Company's proxy statement and form of proxy relating to the Company's next
annual meeting must be received at the Company's executive offices on or before
July 1, 1998 unless, as presently contemplated, the 1998 annual meeting of
shareholders is held earlier than September 29, 1998. If the date of the 1998
annual meeting of shareholders is advanced earlier than September 29, 1998 such
proposals will be required to be received a reasonable period of time in advance
the Company's solicitation of proxies for that meeting. Such proposals should be
submitted by certified mail, return receipt requested, addressed to the Company,
875 North Michigan Avenue, Suite 3000, Chicago, Illinois 60611 Attention:
Secretary.
SOLICITATION OF PROXIES
The Company will bear the costs of soliciting proxies from its
stockholders. In addition to the use of the mails, proxies may be solicited by
the directors, officers and employees of the Company by personal interview,
electronic mail, telephone or telegram. Such directors, officers and employees
will not be additionally compensated for such solicitation, but may be
reimbursed for out-of-pocket expenses incurred in connection therewith.
Arrangements will also be made with brokerage houses and other custodians,
nominees and fiduciaries for the forwarding of solicitation material to the
beneficial owners of Class A Common held of record by such persons, and the
Company will reimburse such brokerage houses, custodians, nominees and
fiduciaries for reasonable out-of-pocket expenses incurred in connection
therewith.
OTHER MATTERS
The directors know of no other matters which are likely to be brought
before the meeting, but if any such matters properly come before the meeting the
persons named in the enclosed proxy, or their substitutes, will vote the proxy
in accordance with their best judgment.
Christopher J. Moffitt
Secretary
September 30, 1997
IT IS IMPORTANT THAT THE PROXIES BE RETURNED PROMPTLY. STOCKHOLDERS WHO DO
NOT EXPECT TO ATTEND THE MEETING ARE URGED TO FILL OUT, DATE AND MAIL THE
ENCLOSED FORM OF PROXY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
15
<PAGE> 18
PLEASE MARK BOXES IN BLUE OR BLACK INK.
<TABLE>
<S><C>
Please mark your
votes as indicated /X/
in this example
1. Election of Directors.
FOR ALL WITHHOLD authority only WITHHOLD Nominees are: Donald R. Caldwell, Alan Kay, Michael E. Mickolajczyk
Nominees for the nominee(s) which authority for
name(s) I have written to all nominees ___________________________________________________________________
the right
[ ] [ ] [ ]
2. To ratify the selection of KPMG Peat Marwick LLP 3. In their discretion, the proxies are authorized to vote upon
as the Company's independent auditors. such other business as may properly come before the meeting, or
any adjournment(s) thereof.
FOR AGAINST ABSTAIN THIS PROXY IS SOLICITED BY THE COMPANY'S BOARD OF
[ ] [ ] [ ] DIRECTORS AND, WHEN PROPERLY EXECUTED, WILL BE
VOTED FOR THE ABOVE PROPOSALS (INCLUDING ALL
DIRECTOR NOMINEES) UNLESS OTHERWISE INDICATED.
Signatures(s) should be exactly as name or names
appearing on this proxy, if shares are held
jointly, each holder should sign. If signing is
by attorney, executor, administrator, trustee or
guardian, please give full title.
Dated: _________________________________, 1997
_________________________________________________
Signature(s)
_________________________________________________
Signature(s)
SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE
--------------------------------------------------------------------------------------------------------------------------------
[FOLD AND DETACH HERE]
</TABLE>
DIAMOND TECHNOLOGY PARTNERS INCORPORATED
CLASS A COMMON STOCK
The undersigned stockholder of Diamond Technology Partners Incorporated
(the "Company") hereby appoints Melvyn E. Bergstein and Michael E. Mikolajczyk
and each of them, the attorneys and proxies of the undersigned, with full power
of substitution, to vote, as indicated herein, all of the shares of Class A
Common Stock of the Company standing in the name of the undersigned at the
close of business on September 5, 1997 at the Annual Meeting of Stockholders to
be held at The Signature Room on the 95th Floor, John Hancock Center, 875 N.
Michigan Avenue, Chicago, Illinois 60611 commencing at 10:00 a.m. on Wednesday,
October 29, 1997, and at any and all adjournments thereof, with all of the
powers the undersigned would possess if then and there personally present and
especially (but without limiting the general authorization and power hereby
given) to vote as indicated on the proposals, as more fully described in the
Proxy Statement for the meeting.
